Dow tries to bounce back with an eye on debt ceiling talks

Dow tries to bounce back with an eye on Biden's debt ceiling talks

Futures tied to the Dow Jones rose 0.28% to 33,152, while the S&P 500 rose 0.21% to 4,131. NASDAQ 100 futures rose marginally 0.06% to 13,492.

In the regular session on Tuesday, concerns about the possibility of default dominated the investors. The Dow led the major indices down 1%. It has barely closed an uptrend in the last seven days, Meanwhile, the S&P 500 and Nasdaq Composite fell 0.6% and 0.2%, respectively.

Although today some optimism seems to be returning. The White House said on Tuesday that President Joe Biden has directed staff to meet daily to discuss unfinished business in debt ceiling talks, The President has also canceled the second leg of an upcoming international trip to Asia to focus on negotiations.

House Speaker Kevin McCarthy believes there is now a “better process” for further negotiations, to the extent that he thinks “a deal is possible by the end of the week.”

“People are going to try to predict what the next headline is going to be,” says Sam Stovall, chief investment strategist at CFRA Research. “The stakes are high, and unfortunately there’s not much we can do to predict what’s going to happen.”

Link to Juan J. “The most likely scenario is a short-term increase or suspension of the debt ceiling to allow the parties, the Biden administration and Congress more time to reach a more definitive cut agreement,” says Fernandez-Figueres. management. Furthermore, “although there has yet been no definite progress in the talks, there is more and more talk about the possibility of a bipartisan agreement that ends the impasse and avoids a payments default by the US, a scenario that As we’ve pointed out before, this would be dramatic for the country’s economy and the global economy.

In addition to an update on debt ceiling talks, investors will focus on data on housing starts and construction permits in the macroeconomic section today, which will be released shortly before the bell.

On the business front, the quarterly results season is entering its final leg. Of the 500 components of the S&P 500, 460 companies have already published their results and the average decline in earnings per share is -3.6%, compared to -8.2% expected (before the first company’s publication). , The qualitative balance is as follows: 77.8% exceed expectations, 18.7% disappoint and the remaining 3.5% are in line. In the previous quarter, EPS declined by -2.4% compared to -3.3%, according to data compiled by Bankinter’s analysis team.

All eyes are directed towards the retail sector above all. If yesterday Home Depot disappointed with its report, also offering the market a pessimistic outlook on business growth this year, today it’s Target’s turn, while tomorrow Walmart will present its accounts.

Fern├índez-Figares cautioned, “The progress of this sector and the business expectations that companies are shifting are very relevant because they are a great indicator of how private consumption in the US could develop, a variable that has so far been greatly underestimated.” has been resistant.” ,

For now, target is up 1.17% after beating Wall Street’s expectations, despite the fact that the discount chain’s sales barely grew year over year and its customers bought more basic necessities. Earnings per share were $2.05, compared to the expected $1.76, while revenue increased to $25.32 billion versus the expected $25.32 billion.

The retailer maintained its outlook for the fiscal year. It expects comparable sales to be in the low-single-digit range and up in the low-single-digit range, while its full-year adjusted earnings per share will range from $7.75 to $8.75.

Outside of earnings season, Western Alliance shares have gained nearly 7% since May 12, after the bank reported an increase in its current-quarter deposits of more than $2 billion. Shares of Western Alliance have experienced a rally recently, up 17% in the past week, and have gained 15% since the start of the week. However, they continue to lose about 47% on the year.

In the commodity markets, US West Texas crude was up by 0.64% at $71.28. Benchmark Brent crude in Europe rose 0.57% to $75.31.

In fixed income, bond yields have been mixed pending talks on debt ceiling. In ten-year terms, the yield fell two points to 3.524%, while that of the two-year bond held steady at 4.082%.

The euro fell 0.30% against the dollar to set an exchange rate of $1.0831 for each community currency.