The debt market is slowly becoming the focus of investor attention at the moment, as a result of the fact that it is the immediate rise in US 10-year bond yields that is driving stock indices down. What is worth adding, however, is that until recently, these developments could be fully attributed to market sentiment toward the Fed's monetary policy, nevertheless, the situation is now becoming somewhat broader.
Kevin McCarthy was ousted from his position as Speaker of the House of Representatives, after Congressman Matt Gaetz of Florida filed a removal motion, which was later voted down in the House of Representatives. The topic of contention here was an agreement on a budget stopgap dismissing the specter of a government shutdown.
According to Goldman Sachs strategists, the historic removal of Republican Kevin McCarthy from his position as Speaker of the House of Representatives could increase the risk of a downgrade of the US credit rating and further lift equity markets.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe U.S. is struggling with mounting debt (see yesterday's chart below), and disagreements in Washington over issues of ongoing federal spending and financial/military support for Ukraine increase the chance of deepening discord and will once again increase the chance of a government shutdown in the future.
Source: ZeroHedge
Importantly, however, in the short term, simply removing McCarthy from office may be limited, as the government has until November 17 to secure funding. On the other hand, however, Goldman Sachs said McCarthy's departure increases the risk of a government shutdown a month from now.
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
