US stocks are rising as the biggest risk on Wall Street’s table appears to be going away. Speaker McCarthy said that the House could vote on the debt ceiling deal as soon as next week. Traders are so fixated on the debt ceiling and regional banking fears that they are losing track of what could happen with inflation. Stocks are heading higher, but could soften if we continue to get more rounds of data that suggest the economy is not breaking.
The end of tightening was supposed to be here, but as recession fears ease, inflation should prove to be sticky. The June FOMC might become a live meeting for markets if June inflation report proves to be hot when you factor out the lag with shelter prices. The latest Fed speak has always suggested June was live and it is starting to look like if they get any hints inflation is stubborn and as long as a debt ceiling deal is reached, they could hike again. King dollar is making a comeback as both US debt ceiling resolution hopes grow and Fed easing bets soften. If something kills risk appetite, it seems the dollar could be in for a nice run.
US Data
The US economy does not want to break. Another round of economic data reminded traders just how resilient this economy remains. Jobless claims data was noisy as it included a reversal in fraudulent filings from Massachusetts. Continuing claims fell which reminded traders how much strength remains in the economy. The US economy might have a snail’s pace of growth, but that won’t get the job done for getting inflation all the way down.
Bitcoin
Bitcoin is hovering near its recent lows as investors await regulatory clarity and whether Wall Street believes any use-case arguments will be made anytime soon. This frustrating trading range has turned off many investors and if the crypto fundamentals don’t improve anytime soon, downward pressure could resume.
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Ed Moya
His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
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