(News Bulletin 247) – Wall Street is expected to open slightly higher on Tuesday morning after the long weekend of ‘Memorial Day’ as an agreement seems to be emerging on the issue of raising the debt ceiling.
Half an hour before the opening, the futures contracts on the major New York indices are advancing from 0.5% to 1%, suggesting a positive start to the session.
The good orientation of the ‘futures’ is mainly explained by the optimism surrounding the outcome of the discussions relating to the raising of the American debt ceiling.
After tough negotiations, the Democratic and Republican leaders seem to have reached an agreement in principle, ruling out the risk of seeing the world’s leading economic power fall into default.
For the past few days, Republican Speaker of the House of Representatives Kevin McCarthy and Democratic President Joe Biden have been expressing some optimism about a successful outcome to negotiations between the White House and Congress.
The agreement would provide for budget cuts, in particular in social spending, as well as a hardening of the eligibility factors for food stamps.
This project could be submitted to the votes of both chambers of Congress as early as this Wednesday, that is to say on the eve of the June 1 deadline when the Treasury would run out of money.
Investors will therefore be able to begin to anticipate the conclusion of an agreement on how to avoid a payment default, which would have seriously damaged economic activity in the United States.
In this context of uncertainty, market operators will closely monitor the publication at the start of the session of the Conference Board’s consumer confidence index for the month of May, which is expected to be down sharply.
Published before the opening, the S&P CoreLogic Case-Shiller index of house prices rose 0.7% in February, a figure well above expectations.
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