Markets mostly bullish after Biden-McCarthy deal on US debt

Markets mostly bullish after Biden-McCarthy deal on US debt

Global stocks were mostly higher on Monday after President Joe Biden and House Speaker Kevin McCarthy reached a final agreement to raise the US national debt ceiling, though the move requires the congressional approval.

Paris, Frankfurt, Tokyo, Sydney and Shanghai advanced while Hong Kong fell. The London and Seoul markets were closed for a holiday and the US markets will remain closed on Monday for Memorial Day.

The US debt deal eased what had been a potentially huge threat to markets around the world. Biden and McCarthy worked over the weekend to try to secure enough support in Congress to pass the measure before the June 5 deadline and avoid a disruptive federal default.

“So far, the markets are reacting cautiously. Encouraged but cautious,” Clifford Bennett, chief economist at ACY Securities, said in a comment.

“This deal simply moves the issue to potentially more politically friendly times after the presidential election in two years. Nothing is certain in this regard, and resolution may be even more difficult than it has been on this occasion,” Bennett said.

Germany’s DAX rose 0.2% to 16,010.98 and the CAC40 in Paris rose 0.1%. Futures for the Dow Jones Industrial Average and S&P 500 were up 0.3%.

In Asian trading, Tokyo’s Nikkei 225 Index jumped about 2% at first, but closed 1% higher at 31,233.54. Sydney’s S&P/ASX 200 jumped 0.9% to 7,217.40. The Shanghai Composite Index added 0.3% to 3,221.45.

In Hong Kong, the Hang Seng fell 1% to 18,551.11.

Taiwan’s benchmark index gained 0.8%, while India’s added 0.5%.

Investors are ahead of another busy week of US economic updates, including data on consumer confidence and employment.

[Con información de The Associated Press]

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