Thursday, June 1, 2023

Wall Street falters as bond returns rise as debt ceiling debate rages

NEW YORK (Reuters) – U.S. stocks searched for direction and benchmark Treasury yields held up, as optimism about a Washington deal on the debt limit was tarnished by a grim regional manufacturing report.

* Futures suggested all three major Wall Street indexes were set to rise, but those gains were sharply pared after the open, after New York state manufacturing data contracted more than expected.

* As first-quarter earnings season draws to a close, market players don’t have much to focus on other than the partisan wrangling on Capitol Hill over the debt ceiling.

* “It’s still a ‘two steps forward, one step back’ market,” said Oliver Persche of Wealthspire Advisors in New York. “Until there is a debt ceiling resolution, which I don’t expect before June 1, I think we will continue to see this volatility and market volatility, especially as incomes go down and very few that investors can hold.

* Wall Street’s main index of global shares edged up slightly, with the pan-European STOXX 600 up 0.12% and MSCI’s broadest of global shares up 0.14%.

* Emerging market shares were up 0.39%. MSCI’s broadest index of Asia-Pacific excluding Japanese shares rose 0.72% and Japan’s Nikkei rose 0.81%.

* Yields on long-term bonds lifted after Atlanta Fed President Rafael Biostic said he does not expect an interest rate cut this year, after worries about a gradual easing of inflation.

* The benchmark 10-year paper was priced at 11/32, up 3.5019%, while the 30-year maturity paper was down 31/32 at 3.832%.

* The dollar fell slightly against a basket of six major currencies after hitting a five-week high, while an impending second round of Turkish elections sent the lira to a near record low.

* The dollar index was down 0.2%, while the euro was up 0.21% at $1.0871. The yen was down 0.31% against its US counterpart at 136.17, and sterling was up 0.4% at $1.2507.

* In commodities, crude rose more than 1.5% and spot gold rose 0.2% to $2,015.10 an ounce.

Nation World News Desk
Nation World News Desk
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