Debt Ceiling Talks | AI Rules the Roost

We sit and wait...

As we approach June 1, nine days away from what Janet Yellen says to be the point we exceed the debt ceiling and possible US default, markets are flat before this mornings open.

As Mark and the members of the Platinum Swing Trading service provided by Best of US Investors discussed on Fridays call, markets and stocks have been trading sideways for same time now. See below.

S&P500: top holding is Apple, Microsoft, Amazon, Nvidia, Google Berkshire Hathaway, Meta, Tesla and UnitedHealth Group.

NASDAQ 100: top holdings are Microsoft, Apple, Amazon, Nvidia, Google, Meta, Tesla, Broadcom and Pepsi.

Dow Jones Industrial Average: top holding are Unitedhealth Group, Goldman Sachs, Microsoft, Home Depot, McDonalds, Visa, Amgen and Caterpillar.

When you look at the top holding of each index, it becomes apparent that this is a very narrow market. Just by holding Apple, Microsoft, Amazon, Nvidia, Google, Meta and Tesla, your doing ok.

As the consumer continues to feel the shrinking of credit, it is most likely that the Dow Jones Industrial Average will faulter. The saving grace in the DJIA is Microsoft and McDonalds. When your broke, you each cheap and McDonalds fills that bill.

The S&P500 and Nasdaq 100 are filled with the headline darlings. As long as Nvidia comes through with earning, these two index’s are doing ok…unless.

The debt ceiling talks continue today after President Biden cuts his trip to Asia short to deal with this issue. My guess is they don’t come to an agreement by June 1st. I see the cost of credit defaults swaps at their highest price as a sign that markets don’t see a deal done in time. CDS are insurance against an asset. In this case, US Treasury’s. Presently prices are up 111.61% in the last month and up 291% over the last year. That should not be seen as a good thing. World Government Bonds

Conclusion

Wait and see. Take in consideration that most of what is pushing markets higher are a select few stocks. We wait and see if our countries leaders can come to some sort of a deal, which I believe has some negative affects on stocks, but could be a short-term boost. Nvidia reports earnings May 24, 2023 could be a make or break for the tech leaders.