U.S. debt ceiling Archives - Equichain Wealth Advisors

Global Market – Review of 2023

Today we will focus on few important events and article covered in 2023. We will start with our first article for 2023, we focus on gold which was seen in a win-win situation at start of 2023. We will cover key global events in last 12 months of 2023

January 2023

• China re-opens its economic from 8-Jan-23 after strict COVID restriction for past 3-years. EURO zone inflation back to single digit @ 9.2%.
• Gold @ $1867 in January 2023 in a win-win situation? After 2023, we can say Gold as asset class which has seen positive result for 2023 till date.

February 2023

• US Fed hikes rate by 25-bps to 4.50% to 4.75% on 1-Feb-23 and guided for more rate hike in 2023.
• Bank Of England raises rates by 50-bps to 4.00%, this brings interest rate by BOE to highest level since 2008.
• Russia plans to cut oil output by 500,000 bpd from March 2023. German yield @ 2.34% highest level seen since 2008.

March 2023

• Silicon Valley Bank: first of few banks to fall his year, regulator shuts down SVB financial group and appoint FDIC.
• US regional bank (FRC) First Republic Bank – Big U.S. banks bail-out by depositing $30 billion.
• ECB hikes rate by 50-bps to 3.50%, highest interest rate since October 2008 and refrain from giving future guidance on interest rate.

April 2023

• OPEC+ nations announce surprise production cut from 1-May-23. Production cut announced by OPEC + nations starting from 1-May-23 till end of the year is at 1.6 million barrels per day.
• Corporate earnings for IT major in US help to improve sentiment. META was up by 13.93% in April 2023 – reacting to its result.
• MICROSOFT & ALPHABET – manage to beat market estimate and improve market sentiment.

May 2023

• US Fed raises rates by 25-bps in meeting held on 3-May-23. Policy statement soften the rate guidance indicating likely pause after May 2023 meeting outcome.
• US Fed on debt ceiling limit: no one should assume the fed can protect the economy from a failure to pay bills on time, economic consequences ‘highly uncertain’ if no debt deal.

Equichain Wealth Advisors: Market View & Opinion

In today’s article we have covered key events and central banks policy change, where we have seen many flip-flops and now when we look back at the events and how we have seen market then and now when global market is trading at life-time high, we might feel at the missed opportunity.

In next week, last article for 2023 – we will cover from June 2023 to December 2023 and we expect global indices to close 2023 at highest level.

Click on the attachment to read the full report:

Global Market – Rewind 2023 – Part 1.pdf

Global Market – U.S. debt deal – suspends debt ceiling till 1-Jan-25

This week we will discuss the U.S. debt deal details as it suspends debt ceiling limit till next U.S. presidential election, but it comes with certain curbs on spending and restriction. Prime facie deal looks well balance – we do believe it another round of monitory expansion.

U.S. debt deal details

• Deal would suspend the $31.4 trillion debt ceiling until Jan. 1, 2025, allowing the U.S. government to pay its bills.
• Non-defense discretionary spending would be “roughly flat” at current year levels in 2024, “when factoring in agreed upon appropriations adjustments,” according to White House officials.

Relief for U.S. Presidential election 2024

• The debt limit extension lasts past 2024, meaning Congress would not need to address the deeply polarizing issue again until after the November 2024 presidential election.
• Still, tough conversations about how to allocate money under the new spending caps will need to take place in Congress this year.

Biden and McCarthy agreed to claw back much of the unused COVID relief funds as part of the budget deal. The estimated amount of unused funds is between $50 billion and $70 billion.

Equichain Wealth Advisors: Market View & Opinion

We expect current U.S. deal could have very limited impact in near term, we see this as yet another round of monitory expansion in a gradual manner. Incoming U.S. economic data would be very important in near term ahead of US Fed meeting on 14-Jun-23.

We see current U.S. debt deal & likely pause by US Fed on 14-Jun-23 would have huge positive impact of risk-on sentiment and big rally is not ruled out. Another hike of 25-bps by US Fed could change the matrix and probability of rally or change in risk-on sentiment. So now US Fed meeting on 14-Jun-23 becomes a very important event for global market.

Click on the attachment to read the full report:

Global Market – U.S. debt – suspends debt ceiling limit till 1-Jan-25.pdf