|
In a note released Wednesday, a team of analysts at JPMorgan Chase & Co. said they see the odds of Washington negotiators failing to reach a deal to lift the debt ceiling by early June at "around 25% and rising." Under such a scenario, they said, there's a "very high likelihood" that Treasury would prioritize principal and interest payments, which would avoid a technical default on government debt. Even so, there would "still be several adverse effects, including a likely downgrade of the U.S. credit rating." They also see the so-called X-date, or time when the government is likely to be unable to pay its obligations, as falling between June 1 and June 7. All three major stock indexes were lower in the final hour of trading on Wednesday, with a lack of progress on the debt ceiling weighing down markets.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
|
|
Stocks stabilized Wednesday after Tuesday's hotter-than-expected inflation data sparked Wall Street's worst selloff in over two years.
Inflation remained in focus today with the early morning release of the producer price index (PPI) for August. Similar to yesterday's consumer price index (CPI), the PPI - which measures what suppliers are charging for goods and services - rose at a slower annual clip in August than it did in July. However, on a month-over-month basis, both PPI and core PPI, which excludes energy and food prices, were up from July's figures.
SEE MORE 12 REITs Flaunting Fast-Growing Dividends
"There is a divergence in headline and core inflation building, where headline is cooling and core is heating up," says Jamie Cox, managing partner at Harris Financial Group. "That's an odd phenomenon and likely influenced by the shift from goods to services post-pandemic. The Fed should proceed with caution and not hit the emergency brake on rate hikes."
While yesterday's selling was broad-based, today's action was more mixed. In terms of sector performance, real estate (-1.2%) and materials (-1.2%) were the biggest laggards, while energy ( 2.8%) outperformed as U.S. crude futures rose 1.3% to settle at $88.48 per barrel.
Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.
As for the major indexes, the Nasdaq Composite ended up 0.7% at 11,719, while the S&P 500 Index ( 0.3% at 3,946) and the Dow Jones Industrial Average ( 0.1% at 31,135) also finished with mode
|
|
