A Speedy Passing of the Debt Ceiling Deal in the USA is Shaking the Markets into Positive Terrain

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UK & Europe: Falling Inflation

Both the Euro Stoxx 50 and the FTSE 100 indexes ended the week positive, on the back of positive news of the US debt ceiling agreement. 

It was announced that inflation in the Eurozone had fallen to 6.3% in May, from 7% in April. 

Many economists are suggesting this fall in inflation is due to the generous subsidies placed on German transport systems, which saw a one off ticket massively reduce the burden of community costs, especially with the rises in petrol prices. 

Meanwhile, a Spanish snap election was called, which failed to register much of a change on local markets. That being said, they may present future political instability in the area and which could ultimately affect markets down the road.

President Erdogan also won another term in office in Turkey. This announcement led the Turkish Lira currency to fall to new record lows.

Americas: Debt Ceiling Agreement

The US markets ended the week positively after congress passed the debt ceiling deal successfully through the House of Representatives and the Senate.

Narrowly dodging the deadline by mere days, US markets sprung up, with some reaching their highest point since August 2022. 

2011 was the last time that a debt deadline was nearly missed, which saw the S&P downgrade the US government rating one spot to AA+. It hasn’t recovered the coveted AAA since and many might question whether they could face a further drop in grading. 

Meanwhile in Uruguay, there’s been a fraud accusation levied at dLocal, the country’s first unicorn. This company is listed on the stock exchange with a value of more than $1 billion. . 

Asia & Australasia: India Rebounds

India officially retook its position as the fifth largest stock exchange in the world, demoting the French stock exchange back to sixth. 

The main culprit in the shrinking of the Indian S&P BSE Sensex index was the fall in the value of stocks in the conglomerate Adani Group a few months ago. 

Adani group has since recovered from some of the accusations levied, also boosting their share price and the overall Indian stock market.  

China wasn’t as positive as their manufacturing figures showed the second consecutive month of contraction. 

Low consumer spending, housing purchases and a weaker currency may mean that in total contrast to many other global economies, they might face deflation. 

Stock World: The Trillion $ Club

NVIDIA became the fifth company on the S&P 500 to have a trillion-dollar market cap, as of last week. 

NVIDIA –  a company that focuses on AI software and hardware –  has seen enormous growth over the past year, with stock prices shooting up 159% in 2023 alone. 

Other companies in this trillion dollar club are the big names like Apple, Microsoft, Alphabet and Amazon. As a collective, they currently account for around 25% of the overall value of the S&P 500. 

Not only do they dominate nearly a quarter of the index, but they’re also about the only ones pulling their weight in terms of their growth. 

Just this year, 96% of the growth of the S&P 500 can be attributed to them, whilst the remaining 495 companies have contributed only 0.3% of the growth. 

Many fear the longevity of this huge dominance and growth, but for the moment, the trillion dollar club deserves a huge pat on the back for their efforts in 2023.