Stocks Surge Globally After US Debt Pact
Biden disagrees with reporter's question about debt ceiling arrangement.
CNN reports at 1:08. We can rewrite this in free English as: According to CNN, at 1:08, something happened.
CNN reports news from both Hong Kong and London. The current political climate in Hong Kong has led to protests. Authorities in Hong Kong and London are dealing with the issue. The situation is still ongoing. Stay tuned for updates.
On Monday, global stocks and oil prices rose. Investors were happy to hear about a possible plan to stop a US debt disaster.
At the start of trading, Germany's DAX rose by 0.3%. France's CAC 40 also went up by 0.2%. Over in Asia, Japan's Nikkei 225 finished at a 33-year high. This is because people are optimistic about the debt ceiling deal and the weaker yen. For the year, the index has risen almost 20%.
Today is a holiday in the US and UK, so their markets are closed. However, Dow and S&P 500 futures are up by 0.3%, while Nasdaq futures rose by 0.5%. Last Friday, US markets gained because of reports that President Biden and Speaker McCarthy could soon reach a deal to help the US government pay its bills.
On Saturday, they agreed to raise the debt ceiling for two years and limit spending. This avoids a big problem: the United States almost defaulted on their debts. If this had happened, the stock and bond markets would be in trouble. It would also hurt the economy here and all over the world.
The main oil prices increased today. Brent crude futures rose 0.6% to reach $77.39 a barrel. On the other hand, WTI crude gained 0.7% and was traded at $73.15 a barrel.
The Turkish lira went down to 20.07 against the US dollar. Tayyip Erdogan won the presidential election and will rule for a third time. Erdogan said he would still reduce inflation by cutting interest rates even if he won.
The stock market in Australia went up by 0.9%. China's stock market also increased by 0.3%. Hong Kong's stock market, however, started higher but then went down by 1%. This is because of technology and real estate stocks. South Korean markets were closed for a public holiday.
The US debt agreement made people feel better. But, the job is not finished.
The leaders need to persuade their followers in Congress to approve the agreement. Republicans run the House and Democrats run the Senate. It's important to pass the deal before June 5 because that's when the US won't be able to pay its debts. Janet Yellen, the Treasury Secretary, said this last Friday and revised the original June 1 deadline.
The analyst at IG said that the agreement is a big step forward in the US debt ceiling problem. People in Asia had a good day of trading because they are not as worried about debt anymore. The people who put money into things around the world are waiting for China to announce some stuff later this week.
China and Japan own $2 trillion in US debt. A US debt default would hurt them too.
