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  • Writer's pictureKevin Hurley

Marketbites: Traders Assess Ongoing Debt Negotiations


Portfolio Manager Commentary:

The S&P 500 rose slightly to start the week Monday as traders assessed ongoing debt ceiling negotiations. Debt ceiling negotiations were postponed to this week from last Friday. President Joe Biden is expected to host top congressional leaders later today. Treasury Secretary Janet Yellen told CNBC last week that failure to hatch an agreement on the debt ceiling would “produce financial chaos,” with the Treasury currently giving June 1 as the date when it could fail to meet its obligations.

“It’s kind of a waiting game,” said Globalt Investments’ Keith Buchanan. “Each day that goes by, and each postponement, each day there’s not a development … I think it will grow more and more difficult for the markets to really get any traction.”

Elsewhere, corporate earnings season is drawing to a close, but some major retail reports this week will give investors further insight into the state of the consumer. Home Depot reports Tuesday. Target and Walmart are set to report tomorrow and Thursday, respectively.

Chart of the Day:

There’s a new status symbol in corporate America: the ability to keep raising prices. Companies continue to jack up prices on a range of goods from diapers to handbags—and some are even bragging about it to investors as a sign of brand strength. In some cases, the increases more than cover the hit from higher raw material, labor, and other costs, fattening profit margins. The price increases come as inflation is moderating and a weakening economy foreshadows a potential pullback in consumer spending. U.S. household spending rose in March from the prior month, but growth is slowing, suggesting that the pain of higher prices is starting to take a toll.

Source: WSJ

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