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🌤️ Happy Tuesday
Good morning. Yesterday was both Memorial Day and a market holiday. If you usually spend your Mondays working (or trading), we hope you were able to take a break and spend time with family and friends.
Today, we're going to break down the news highlights from this weekend. Once the market opens later today, we’ll be right there with you checking to see how the various indices react to the headlines.
Read time: 2 minutes
WEEK IN REVIEW
📈 Market Performance
President Biden speaking on the phone, via rawpixel
As discussed in last week’s issue Default Debate Looms Over All, general investor uncertainty about reaching a default deal was likely a reason for slow S&P growth. Despite this, the market held constant last week and even inched up 0.35% from Monday’s market open to Friday’s close.
Now, the S&P 500 seems to be pushing to hold the 4,200 point mark, as the week started around 4,195-4,202 before dipping down on Wednesday to 4,105. However, optimism about a deal breakthrough propelled the index back up to 4,200 by mid-Friday.
One major takeaway is how the S&P 500 (or other indices) and the companies that make them up are highly responsive to feelings like optimism and skepticism, even before the news is published.
🤝 Debt Deal Reached, Not Yet Passed
With only a few days left until the U.S. Government is projected to default on its debts, President Biden announced Sunday evening that a deal had been reached with Republican Speaker of the House Kevin McCarthy.
While the two made clear the details of the deal were agreed upon, legislators rushed to draft a bill that would need to be reviewed by members of both parties before a vote. (Source: CNBC)
Now, the final draft of the bill containing various spending limits and agreements must pass the House and, later, the Senate. While Biden and McCarthy agreed on the substance of the bill in their negotiations, both have to sell the bill to their respective parties.
Any partisan defections could slow the passage of the bill, a risk that neither leader wants to take so close to the June 5th default deadline. (Source: WSJ)
Reaction to the news should be reflected (to some degree) during today’s market open hours. As mentioned above, optimism that the bill can pass both the House and Senate before the deadline would see a steady, or even increasing, S&P value.
ONE MORE THING
🤝 Keep in Touch
This week's issue was edited and published by Abbas Akhtar.
For general announcements or updates on what we're working on, follow Abbas on Twitter 👉 @RealAbbasAkhtar
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Thanks again for reading!
