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President Joe Biden delivers a brief update on debt ceiling negotiations in the Roosevelt Room of the White House on May 17, 2023 in Washington, D.C.

Chip Somodevilla |: Getty Images News |: Getty Images:

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Good news. Biden will meet with McCarthy in person later today to discuss the debt ceiling after talks broke down over the weekend. The bad. there is no telling how the negotiations will proceed.

  • US President Joe Biden and Speaker of the House of Representatives Kevin McCarthy will meet at the White House on Monday to resume talks on the debt ceiling, NBC News reports. Discussions were suspended over the weekend, and McCarthy told reporters that talks could not resume until Biden returned from the Group of Seven summit in Japan.
  • U.S. stocks fell on Friday as investors fretted over a delay in the debt ceiling deal, countering their optimism earlier in the week. Asia-Pacific markets opened the week higher. China’s Shanghai Composite rose 0.1% as shares in chipmakers rose after the country banned key infrastructure operators from buying products from U.S.-based chip rival Micron.
  • Pro Analysts I think the stock could go higher in the second half of the year if three conditions are met. Economic data releases this week, including the May PMI Composite, Fed meeting minutes and GDP figures, will make it clearer whether markets can rally.

The Writers Guild of America may be on strike right now, but we don’t like dramatic drama in the form of US debt ceiling negotiations.

It’s a good thing the markets were closed over the weekend, or they probably would have heeded McCarthy’s comments that talks could not resume until Biden returned to the country. Investors were already angry on Friday when their optimism was dashed when Republican negotiators pulled out of the discussion. The S&P 500 fell 0.14%, the Dow Jones Industrial Average lost 0.33% and the Nasdaq Composite lost 0.24%.

They certainly weren’t big declines, suggesting investors believed Washington would eventually come to a deal, as it has always done in the past. Fed Chairman Powell’s comments that interest rates should not be high also cheered investors. The CBOE Volatility Index, which measures investors’ expectations of where the S&P will move over the next 30 days, traded at 16.8 on Friday. It is quite close to its 52-week low, indicating stability and calmness.

Indeed, the main indicators had a good week. The S&P added 1.65% and the Nasdaq rose 3% for the week, their best performance since March.

Still, that was before McCarthy began the rhetoric about debt ceiling negotiations. The good news is that Biden will meet with McCarthy in person later today. The bad. there is no telling how the negotiations will proceed.

Detours and divisions are perhaps inevitable when it comes to White House negotiations across the political spectrum. We can only hope that the US will not throw its own economy and financial world into chaos. It’s a scenario that belongs on television, not the real world.

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