NEW YORK (Reuters) – U.S. President Joe Biden and Republican Congressman Kevin McCarthy have reached a tentative deal to raise the federal government’s debt ceiling to $31.4 trillion, ending a months-long standoff.
But the deal is still struggling to pass through Congress before the United States runs out of money to pay its debts in early June.
BOB STARK, GLOBAL HEAD OF MARKET STRATEGY, KYRIBA,
While the White House debt ceiling agreement is great news, the US government still has a cash flow problem and time is running out to finalize the deals. The debt ceiling agreement is only the first step in rescuing the government from the brink of illiquidity.
The markets have already predicted that a deal will be reached this weekend. What investors will now focus on is the cost of spending cuts to the health of the US economy. What impact will these spending cuts have on GDP and economic growth?
Already, corporate CFOs are updating their cash forecasts to account for the costs of this debt ceiling deal, trying to project the impacts of spending cuts on their own organization’s financial projections. How many businesses will be negatively affected by the fallout from this deal? The cost of what Democrats waived on extending the two-year debt ceiling will be felt for the next decade as the US economy struggles to rebalance.
An immediate upside on Monday is that short-term Treasury yields will begin their return to normal, while U.S. Treasuries and Treasuries can return to their risk-free status and provide security for investors and the American people.
STUART KAISER, HEAD OF EQUITY TRADING STRATEGY, CITI, NEW YORK:
The debt ceiling agreement removes a tail risk to economic growth, but does not significantly change the baseline scenario. As a result, this is a modest positive for equity markets at the index level, but progressively more positive for areas such as weak balance sheet stocks, small caps and perhaps cyclicals. These have underperformed recently and are more exposed to growth and credit risks.
The story continues
DAMIEN BOEY, CHIEF MACRO STRATEGIST, BARRENJOEY, SYDNEY:
“We’ll have the optimism that a deal is done and a real crisis averted, and the dreaded cash drain at the same time. The net impact is ambiguous, but I think you’ll find that the volatility in interest rates Interest will rise, and that will cause banks and non-AI growth stocks to lag.”
MOH SIONG SIM, CURRENCY STRATEGIST, BANK OF SINGAPORE, SINGAPORE:
“The deal still needs to pass both the House and Senate. Assuming the agreed-upon spending cuts don’t materially impact U.S. growth prospects, the debt deal should be both positive for risk and for the US dollar.
“The need for the Treasury to rebuild its cash balance could tighten liquidity.”
VISHNU VARATHAN, HEAD OF ECONOMY, MIZUHO BANK, SINGAPORE:
“There could be some initial relief that could push yields a little lower, as well as some upside in the US dollar, alongside equities. But the vagaries of getting the deal through Congress could put the brakes on.
And beyond that, the overriding implications of squeezing cash from issues to bolster liquidity that is very low at the Treasury can perversely boost yields and put a damper on equities. The dollar, however, can be bid higher.”
THIERRY WIZMAN, GLOBAL FX AND INTEREST RATES STRATEGIST, MACQUARIE GROUP, NEW YORK:
“There is definitely going to be some relief in fixed income markets. Where there was the most distortion from uncertainty was in credit markets and in the treasury market… I believe that on Tuesday, when the market reopens in the United States, we should see both of these distortions corrected.
“But what it doesn’t solve is that all along the Treasury curve, yields have been rising recently. And I think they’ve been rising in anticipation that there will be a lot of Treasury bill issues. Treasury, notes and notes in the coming weeks because the US Treasury needs to replenish its liquidity, and so I think Treasury bond yields will remain elevated for some time as this supply is absorbed.
“And I think stocks can do well here. It was definitely an overhang in the stock market.
“As for the dollar, I’m inclined to think it might strengthen the dollar a bit because it would weaken the de-dollarization argument. But not by much, just a little more, because the dollar has already weakened. has been strengthened a bit in recent weeks.”
AMO SAHOTA, DIRECTOR, KLARITYFX, SAN FRANCISCO:
“It will be pretty good for the market. I think it will keep expectations still pretty warm with the performance of the Nasdaq. It will be good for stocks.
“I think that might also give the Fed more reason to feel confident about trying to raise rates again. while he thinks that everything else being on par, the economy is still doing very well, we can see that, particularly in the tech sector, spending has also been quite robust.
“I think it’s holding the dollar up pretty well as well. I think generally everyone should be pretty happy with that, although we want to see what the color of the deal looks like. Initially it looks like it’s happening more than cuts, which is really what the Republicans were asking for.
“And it’s going to be important to see how long the deal lasts, whether…we’re going to face those same issues again. Or whether those issues are also going to be resolved with a long-term deal. I’m very, very doubtful that this is a long-term deal.”
(Reporting by Laura Matthews in New York and Tom Westbrook in Singapore; compiled by the Global Finance & Markets Breaking News team; editing by Kim Coghill and Andrea Ricci)
The mention sources can contact us to remove/changing this article
What Are The Main Benefits Of Comparing Car Insurance Quotes Online
LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos
to request, modification Contact us at Here or [email protected]
- Premenstrual disorders increase early menopause and vasomotor symptom risks
- Poland stops its Ukraine weapon supply – BBC News
- NFL star reveals pick-up line he told Taylor Swift
- Access to new Covid-19 vaccines delayed for Vermonters on Medicaid
- The Free Speech Wars on Campus
- What is behind ‘dangerous’ TikTok frenzies? – BBC News
- Does this foldable kayak really work?
- Obesity is becoming more common in a growing number of states, CDC data show
- Humanity has ‘opened gates of hell’ says UN Secretary General at climate summit – BBC News
- Jackie Kennedy’s ex-Secret Service agent makes new claim about the JFK assassination
- Medicaid: Half a million children and families regain coverage
- Five to be charged in UK with spying for Russia – BBC News