Morgan Stanley says US debt ceiling debate is a "lose-lose for markets"
Morgan Stanley’s US equity strategist Michael Wilson says the the debate around raising the US government’s borrowing limit will trigger sharp swings in equity markets.
- most clients “believe it will ultimately get resolved, but not without some near-term volatility”
- many have framed the event as “a lose-lose for markets.”
- when the US Treasury’s cash runs out it could potentially squeeze liquidity and lead the S&P 500 lower, “given the index’s sensitivity to changes in liquidity in recent history.”
Wilson's note was reported by Bloomberg (gated). More:
- Although the first-quarter reporting season has been largely better than feared, Wilson said he remains bearish in his forecast for full-year profits amid slowing economic growth. “The market is speaking loudly under the surface — it is bracing for further macro and earnings disappointments,”
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Further talks between Biden and congressional leaders are scheduled for 3pm US Eastern time on Tuesday, 16 May 2023.
This article was written by Eamonn Sheridan at www.forexlive.com.from Forexlive RSS Breaking News Feed https://ift.tt/txc7lb3
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