U.S. debt: Watch out for these warnings before celebrating the deal

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2023-05-29 08:13:04  • 3 mins

Investing.com - Markets started the week in the green, with the Ibex 35, CAC 40 and DAX buoyed by U.S. President Joe Biden's confirmation on Sunday that he has reached a final agreement to raise the debt ceiling with House Republican leader Kevin McCarthy, and that the text is ready to be voted on in Congress.

The agreement would suspend the debt limit until January 1, 2025. This eliminates it as a potential issue in the 2024 presidential election.

Analysts at Link Securities said that welcome the agreement as it will prevent the country from defaulting on its payment commitments, which investors had been fearing.

Stock market reaction

According to the analysts, the fact that both Wall Street and the London Stock Exchange will be closed today for local holidays will, however, mean that trading volumes will be very low, in line with what has been happening in recent sessions. They expect, however, that investors will once again bet on risk, in what can be considered a small relief rally, which began on Friday, as it is now very unlikely that the U.S. will default.

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