Investors should be wary of how much faith they put in the debt-ceiling rally, says our call of the day.
Stock markets may have woken from a slumber thanks to debt-ceiling hopes, which sparked a Wednesday rally for Wall Street, nudging the S&P 500 SPX out of a grinding trading range.
As for Wednesday’s action, some are highlighting the bullish bets that are counting on the White House and lawmakers getting a deal done : “But when we get past the debt ceiling, the Treasury will start issuing new bonds and that will have the net effect of taking liquidity out of this market,” removing a tailwind for equities, said Dawson.
Our last word goes to one bullish voice out there who predicted a move higher for stock at the start of the week. “The last time the S&P 500 traded above 4,200 was in August 2022 and the 4,200 level has been rejected multiple times since then. It is possible that the near-term consolidation we have seen is building technical energy for a breakout,” he said, adding that they remain bullish that 4,200 will be reached.
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