“Finance Update: US Debt Ceiling Negotiations and Maxi-Dividend Distribution Impact on Stock Markets”

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For the Stock Exchanges, a day poor in macroeconomic insights is looming and with eyes focused on the negotiations between the White House and the Democrats for raising the US debt ceiling. Worth noting is the maxi-dividend distribution by around 60 companies which will penalize Piazza Affari by around 1.3 per cent.

Meanwhile, Asian stocks rose as US President Joe Biden said relations with China should improve “in the short term” and as the market awaits possible progress in talks on the US debt limit. US futures were unchanged. Hong Kong’s Hang Seng index rose more than 1%, led by technology stocks. Samsung Electronics Co. and SK Hynix Inc were among the largest contributors to the benchmark after China said US rival Micron Technology failed the cybersecurity exam.

Last week saw the European stock exchanges close slightly higher thanks to a final leap which, among other things, brought the index DAX 30 of Frankfurt to reach new all-time highs. Positively also the FTSE MIB of Piazza Affari, while Wall Street slowed down right at the end due to the uncertainties surrounding the fate of the US public debt and also to the doubts that appear among investors on the fact that the Federal Reserve may not cut rates by the end of the year as in hopes.

These two main themes will probably be the main issues in the next few days, with possible repercussions also on a bond market that has seen rising rates, but also BTPs will reduce the spread against the Bund to 184 basis points pending the response from Moody’s on public debt which then did not arrive (the agency did not update the rating). In the meantime, today we start again with a few macroeconomic data: among these, machinery orders in March in Japan, and the 5-year and 1-year prime rate in China and consumer confidence in May in the Eurozone.

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