The Tribune

By CHRIS ILLING

CCO @ ActivTrades Corp

The averted US debt default, and positive data from the American jobs market, put international investors in a buying mood. In Germany, the Dax index jumped over the 16,000 point mark last Friday. Wall Street also closed higher.

The insolvency of the US government, which has finally been averted, has given the stock market a further boost. After the House of Representatives and the Senate approved a bill suspending the national debt ceiling in the US for the time being, job data also helped Wall Street get off to a positive end of the week.

The approval of the US debt deal, and the latest US jobs data, make investors on Wall Street cautiously optimistic. The Dow Jones index was at 33,683 points at 1pm on Friday. The broader S&P 500 gained 1 percent to 4,278 points. The Nasdaq technology exchange index climbed 0.7 percent to 13,242 points.

After the House of Representatives, the Senate on Thursday also approved legislation suspending the $31.4trn debt ceiling. A default by the US has thus been averted. In addition, the US unemployment rate rose to 3.7 percent in May from 3.4 percent in April. This fuelled new hopes that the US Federal Reserve will pause interest rate rises. The US economy continues to defy gravity, adding 339,000 jobs in May even after ten rate hikes in 14 months.

Among the individual stocks, shares in Adidas and Puma benefited from better-than-expected quarterly figures and a better outlook from US sporting goods retailer, Lululemon. Adidas rose by 3.4 percent as one of the favorites in the Dax, and Puma on the MDax by 4.2 percent.

In terms of US individual stocks, an increase in full-year guidance buoyed shares in yoga apparel maker, Lululemon. Its stock gained 15 percent. Shares in Nike also climbed by a good three percent. A better-than-analysts’ outlook also bolstered shares in chipmaker Broadcom, which rose 2.5 percent after a narrow pre-market loss.

Oil prices edged up slightly in early trading on Friday. In the morning, a barrel of Brent crude for delivery in August cost $74.63. That was 35 cents more than the day before. The price of a barrel of West Texas Intermediate (WTI) for July delivery rose by 32 cents to $70.42.

There is tension in the crude oil market ahead of the Opec+ oil union meeting this weekend. Most experts expect the cartel’s funding policy to remain unchanged. But caution is advised. About two months ago, several OPEC countries had surprisingly reduced their production shortly before a similar meeting. Saudi Arabia has recently warned speculators not to bet on falling oil prices.

But the capital market is split like never before between optimists versus pessimists. New records on the stock market and China’s reopening on one side, Ukraine war and still high inflation on the other side. Opportunities on both sides for the savvy investor.