Zinger Key Points
- As the deadline for the Treasury running out of cash approaches, frantic efforts are on to avert a potential default.
- The tech sector, which has led the year-to-date rally, could see sentiment reverse as investors turn defensive, strategist says.
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Debt ceiling stalemate was the main topic of discussion over the weekend, especially as the talks between the Biden administration's negotiators and the House Republicans paused on Friday.
Here’s a recap of a few major headlines that hit the wire over the weekend:
1. Biden Talks Tough On Debt Ceiling Impasse: President Joe Biden, who was at the G-7 meeting in Japan over the weekend, sent a stern message to "MAGA" Republicans. As he proposed savings of about $1 trillion through spending cuts, in addition to his previous $3 trillion deficit reduction proposals, the president said a bipartisan deal on default is unlikely to be made solely on GOP members' terms.
"They need to move too," he said.
2. Banking Sector's Looming Risk: Hedge fund manager Hugh Hendry warned that the Fed's monetary policy has increased the probability that banking customers could face restrictions on the amount of cash they can withdraw.
"If we went back a year ago, the probability you would assign to that would be almost zero. And I'm saying that probability, like mercury, is rising," he said.
3. Kashkari Hints At Going Slow On Rate Hikes: Minneapolis Fed President Neel Kashkari, who is a member of the Fed's policy-setting arm, said in an interview that he is open to the idea of moving a bit more slowly on interest rates, Wall Street Journal reported.
The statement was construed as a pause at the June meeting, given the central bank upped the fed funds rate by 25 basis points to 5-5.25% at the May meeting. He, however, ruled out the end of rate hikes in the current monetary policy cycle. "I would object to any kind of declaration that we’re done," he said.
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4. Big Tech Rally Could Lose Steam, Strategist Warns: Anna Paglia, managing directors and global head of ETFs and indexes strategies at Invesco warned that investors are beginning to play defense when it comes to the tech sector.
She reportedly said in an interview with CNBC that she saw a bearish pattern in the big tech rally.
5. Crypto Donations For Presidential Campaign: Presidential candidate Robert Kennedy Jr. has announced that he will accept campaign donations in Bitcoin BTC/USD. Speaking at the Bitcoin 2023 Conference in Miami on Friday, Kennedy said his campaign would be the first in American history to accept donations. He launched his campaign for the Democratic primary on April 19.
What Else: Bill Gates shares good news that should bode well for tackling climate change. He quoted a report carried out by Scientific Journal, which said renewables accounted for about one-third of electricity generation in 2022 and that the figure is rising.
The Pentagon overestimated the cost of the ammunition, missiles, and other equipment it sent to Ukraine by about $3 billion a Senate aide and a defense official reportedly told Reuters. The blunder may lead to more weaponry sent to Ukraine for the country’s defense against Russia, it added.
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