The stock market climbed on speculation that a narrower group of Washington negotiators will break a deadlock on raising the U.S. debt ceiling and avoid an unprecedented default.
Equities halted the recent trading lull, with gains in the S&P 500 topping one per cent and the Nasdaq 100 hitting the highest since August. Treasuries dropped, with yields on 10-year notes approaching 3.6 per cent. President Joe Biden expressed confidence there will be no default, and House Speaker Kevin McCarthy said reaching an agreement this week is “doable.”
JPMorgan Chase & Co.'s chief Jamie Dimon said the U.S. government “probably” will not default on its debts. He joined other top executives of major banks in a meeting with Senate Majority Leader Chuck Schumer to discuss the debt limit. “We all know the U.S. Treasury is about to run out of ways to pay its bills, but we have seen this movie too many times before,” said Chun Wang at Leuthold Group. “While, theoretically, there is a threat of default, we certainly don't recommend planning our lives around it. The script is very predictable: political posturing and grandstanding will go on until the 11th hour, and then a deal will be hastily put together to avoid a default.
“The tale of optimism does not exist,” she told Bloomberg Television. “Is there a possibility of a congressional miracle? If it at all comes in a little bit easier than we expect, that right tail is very cheap.”
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