US policymakers reach an agreement on raising the debt ceiling. The Turkish lira fell to an all-time low

At the close of the stock market on Friday, the Dow Jones Index (US30) gained 1.00% (-0.94% for the week), and the S&P 500 (US500) increased by 1.30% (+0.35% for the week). The NASDAQ Technology Index (US100) jumped by 2.19% on Friday (+2.46% week-to-date).

After weeks of difficult negotiations, McCarthy and Biden reached a tentative agreement this weekend on raising the debt ceiling, but now they face the task of getting a deal through the Republican-controlled House and the Democrat-controlled Senate. And it needs to be done by June 5 to avoid a first-ever default in the nation's history. Republican House Speaker Kevin McCarthy said Sunday that a majority of Republicans in the House would support the deal.

Ford Motor Company (F) shares jumped more than 6% after announcing a major deal with Tesla (TSLA) that allows Ford electric cars to be charged at Tesla Supercharger stations in the United States and Canada. Boeing (BA) may strike its second deal with Saudi Arabia this year – the company is in talks to sell at least 150 of its 737 MAX airliners to startup Riyadh Air.

Stock markets in Europe were mostly up on Friday. German DAX (DE30) grew by 1.20% (+1.55% for the week), French CAC 40 (FR40) added 1.24% on Friday (-1.99% for the week), Spanish IBEX 35 (ES35) gained 0.82%v(-0.56% for the week), British FTSE 100 (UK100) closed positive on Friday 0.74% (-1.67% for the week).

This weekend, Dutch Central Bank Governor Klaas Knott said the European Central Bank needs at least two more 25-basis-point interest rate hikes. The probability of a rate hike at the ECB's June meeting is 100%.

The Turkish lira hit a new low against the dollar on Monday after incumbent Turkish President Erdogan defeated his opponent in the second round of presidential elections. Erdogan is a fan of low-interest rates. Low rates lead to a depreciation of the currency. The Turkish lira has fallen more than 90% since December 2021.

Oil prices rose on Friday as US officials are close to an agreement on a debt ceiling. Nevertheless, markets remain cautious as the deal still needs to be formalized, which could take some time. Also on Friday, there were new concerns about the Federal Reserve's interest rate hike next month amid strong US consumer spending data and inflation PCE figures. Rate hikes tend to limit demand, which is negative for oil.

Asian markets mostly fell last week. Japan's Nikkei 225 (JP225) decreased by 0.03% for the week, China's FTSE China A50 (CHA50) lost 4.28% for the week, Hong Kong's Hang Seng (HK50) was down 4.01% for the week, India's NIFTY 50 (IND50) added 1.15%, and Australia's S&P/ASX 200 (AU200) closed negative 0.56% for the week.

Japan's Nikkei returned to a near 33-year high on Monday amid improving risk appetite as investors welcomed a tentative agreement between US lawmakers to raise the government debt ceiling and avert default.

China's industrial profits fell sharply in the first four months of 2023. According to the National Bureau of Statistics (NBS), profits fell by -20.6% in January-April from a year earlier. Chinese companies are struggling with both weak domestic demand and declining demand in the country's main export markets. Chinese markets continued to lag behind their peers due to lingering fears of a slowdown in the country's economic recovery. China is also struggling with a new spike in COVID-19 cases, which could slow the economic recovery this year.

Lenovo, the world's largest PC maker, said this week that quarterly revenue and profits fell in January and March, and the company will cut 8% to 9% of its workforce to reduce costs.

In the commodities market, futures on orange juice (+13.48%), corn (+9.11%), and soybeans (+2.22%) showed the biggest gains last week. Futures on palladium (-6.75%), natural gas (-6.46%), coffee (-5.81%), platinum (-4.33%), cotton (-3.55%), lumber (-2.89%) and silver (-2.56%) showed the biggest drop.

S&P 500 (F) (US500) 4,205.45 +14.67 (+0.35%)

Dow Jones (US30)33,093.34 +328.69 (+1.00%)

DAX (DE40) 115,983.97 -252.01 (-1.55%)

FTSE 100 (UK100) 7,627.20 129.67 (-1.67%)

USD Index 104.23 -0.03 -0.02%

by JustMarkets, 2023.05.29

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.