President Joe Biden delivers a brief update on ongoing negotiations on the debt ceiling in the Roosevelt Room of the White House on May 17, 2023 in Washington, DC.
Chip Somodevilla | Getty Images News | Good pictures
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The good news: Biden will meet with McCarthy in person today to discuss the debt ceiling, after stalling in talks over the weekend. The bad: There’s no telling how the negotiations will proceed.
- US President Joe Biden and House Speaker Kevin McCarthy will meet at the White House on Monday to resume talks on the debt ceiling, NBC News reported. Over the weekend, the discussions were halted, with McCarthy telling reporters that talks could not resume until Biden returned from the Seven Summit in Japan.
- U.S. stocks slipped on Friday as investors worried about a delay in a deal on the debt ceiling, contrary to their hopes earlier in the week. Asia-Pacific markets opened higher for the week. China’s Shanghai Composite rose 0.1% as shares of Chinese chipmakers rose after the country banned operators of key infrastructure from buying products from US-based chip rival Micron.
- PRO researchers If all three conditions are met – I think stocks will rise even higher in the second half of the year. Economic data coming out this week, including May’s PMI composite, central bank meeting minutes and gross domestic product figures, will shed light on whether markets will rally.
The Writers Guild of America may be on strike right now, but we don’t have the kind of dogged drama — in the form of the U.S. debt ceiling negotiations.
It was a good thing the markets were closed for the weekend, or they could have fallen on McCarthy’s comments that negotiations could not resume until Biden returned to the country. Investors were already spooked later Friday when their hopes evaporated when Republican negotiators walked out of the debate. The S&P 500 fell 0.14%, the Dow Jones Industrial Average lost 0.33% and the Nasdaq Composite fell 0.24%.
Of course, those aren’t huge drops, with investors assuming Washington will eventually reach a deal — which it always has in the past. Fed Chairman Powell’s comments that rates don’t need to be higher cheered investors. The CBOE Volatility Index, which measures investors’ expectations of where the S&P will move over the next 30 days, traded at 16.8 on Friday. This is a 52-week low, indicating stability and calmness.
Indeed, the major indices had a good week. The S&P added 1.65% and the Nasdaq rose 3% for the week — their best performance since March.
Still, that was before McCarthy ramped up the rhetoric about debt ceiling negotiations. The good news is that today Biden will meet with McCarthy in person. The bad: There’s no telling how the negotiations will proceed.
Detours and divisions are inevitable when it comes to White House negotiations across the political spectrum. We can only hope that America does not plunge its own economy and the financial world into chaos. This is a scene on television, not the real world.
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