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Global Fundamental Analysis 19/05/2023

Global Fundamental Analysis 19/05/2023, FP Markets

Opening Call: The Australian share market is to open higher.

U.S. stocks closed higher with debt-ceiling talks in focus. The WSJ Dollar Index rose and gold settled lower as a debt-ceiling deal by Sunday was termed ‘doable.’ Treasury yields jumped after a Federal Reserve official said recent data don’t yet justify a pause in rate increases. Crude-oil prices ended lower.

Australian Market

Australia’s S&P/ASX 200 closed 0.5% higher amid gains by both large-cap companies and tech stocks. Shares of nine of the 10 largest companies by market capitalization finished higher.

US Market 

Stocks finished higher after House Speaker Kevin McCarthy told reporters the House of Representatives could vote on a debt-ceiling deal as soon as next week. The S&P 500 rose about 0.9%. The Dow Jones Industrial Average gained 0.3%, while the Nasdaq Composite Index advanced 1.5%.

Walmart, the biggest U.S. retailer, climbed after reporting earnings that beat Wall Street’s estimates on revenues and profit. Meanwhile, Dallas Fed President Lorie Logan suggested that barring further weakness in the economic outlook, she would be prepared to lift the benchmark federal-funds rate by a quarter percentage point at the central bank’s next meeting.


Gold prices settled at their lowest level since late March, pressured by a stronger U.S. dollar and hopes for a deal to raise the U.S. debt ceiling by Congress. June gold declined by 1.3%, to settle at $1,959.80 per ounce on Comex, the lowest since March 27. 

Speaker of the House Kevin McCarthy said a debt-ceiling deal might be “doable” by Sunday. However, market experts cautioned that reaching a deal is merely the first step in what could be a fraught process.

Oil Futures

Oil ended lower, losing around half of the prior day’s gain, as investors kept tabs on debt-ceiling negotiations. West Texas Intermediate crude for June delivery fell 1.3% to settle at $71.86 a barrel on the New York Mercantile Exchange following a gain of 2.8% Wednesday. July Brent crude, the global benchmark, fell 1.4% to $75.86 a barrel on ICE Futures Europe.  

Oil traders are “exhibiting a more cautious approach, particularly with regards to the outcome of the debt ceiling negotiations,” following gains for oil prices on Wednesday, said Ricardo Evangelista, senior analyst at ActivTrades.

Asian Markets

In Asian trading, Japan’s Nikkei Stock Average ended 1.6% higher, led by gains in electronics stocks, as optimism has grown for U.S. debt-ceiling negotiations. Sony Group gained 6.4% following news that it is considering listing its financial unit.

Chinese shares ended mostly higher amid divergent expectations for policy easing after recent domestic economic data signaled that economic recovery could be losing steam. The Shanghai Composite Index ended 0.4% higher. The Shenzhen Composite Index rose 0.1%, and the ChiNext Price Index closed 0.7% lower.

  • Global Fundamental Analysis 19/05/2023, FP Markets
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