55 minutes ago
According to RBC’s Lori Calvasina, these are the sectors that will be hit hardest by a debt ceiling cut
At Monday night’s meeting of President Joe Biden and House Speaker Kevin McCarthy, investors turned their focus to the debt ceiling as the next potential trigger for a market decline.
Financials, energy, materials and industrials were among the worst-performing sectors in the S&P 500 in previous debt ceiling cuts, RBC Capital Markets’ Lori Calvasina said Monday night on CNBC’s Fast Money program. She cited the company’s 2011 analysis of claims around the debt ceiling.
Defensive sectors held up best during these declines, with healthcare being the worst performing sector. The technology and growth sectors are “right in the middle,” said Calvasina, head of US equity strategy at RBC.
“While I think the technology sector will be hurt, it’s likely to hold up better than some of these more cyclical areas if we don’t reach an agreement,” she added.
– Darla Mercado
Before an hour
McCarthy and Biden meet as debt ceiling threatens markets
President Joe Biden and House Speaker Kevin McCarthy spoke to reporters about the debt ceiling at their scheduled meeting.
Biden expressed hope for progress and stressed the need to ensure tax loopholes are closed so that wealthy people pay their fair share of taxes. McCarthy said he was looking forward to finding common ground, having previously said decisions had to be made at the meeting.
Investors are awaiting updates on progress on the debt ceiling negotiations amid concerns about what a default could mean for the economy.
— Alex Harring
Before an hour
Yellen’s latest forecast: “Most likely” the Treasury will be unable to pay the debt by early June
Treasury Secretary Janet Yellen has just released a new letter to Congress leaders with updated guidance on the earliest possible date the US could face serious risk of default.
The date in the new letter remains June 1st, the same date as since the beginning of May. However, the new message has two key differences from a very similar letter Yellen penned on May 15.
“With an additional week of information now available, I am writing to note that we understand that it is highly likely that the Treasury will no longer be able to meet all of the Government’s obligations if Congress has not taken action to raise or suspend the debt limit by then.” In early June and possibly as early as June 1,” Yellen writes.
The phrase “very likely” is new. Last week, Yellen wrote that it was only “probable”.
Yellen also deleted an entire sentence from last week’s letter, saying the contingency measures the Treasury Department is currently taking could help push the June deadline back.
“The actual date that the Treasury Department exhausts the extraordinary measures could be a few days or weeks after these estimates,” reads Yellen’s May 15 letter to Congressional leaders.
The new letter comes as President Joe Biden is about to meet in person with House Speaker Kevin McCarthy, part of an increasingly urgent effort to reach a bipartisan compromise.
— Christina Wilkie
Before an hour
Stock futures are up slightly
Stock futures were slightly higher just after 6pm ET.
Futures linked to the Dow, S&P 500 and Nasdaq 100 were all up 0.1%.
— Alex Harring