stocks, news, U.S. debt ceiling

Jose Manuel Campa, chairperson for the European Banking Authority, discusses the banking turmoil and the prospect of consolidation in the industry.

The IMF estimates that the U.K. will avoid recession in 2023, but says the country’s positive growth will be “subdued.”

The latest release suggests the U.K. GDP will grow by 0.4% this year — a 0.7 percentage point increase on the financial agency’s April estimate of a 0.3% downturn.

“Stubbornly high” inflation had served to hinder growth, the IMF said, along with the impacts of Russia’s full-scale invasion of Ukraine and lingering supply scarring from the Covid-19 pandemic.

— Hannah Ward-Glenton

Bob Parker, senior advisor at International Capital Markets Association, says that’s despite the fact that the chance of the U.S. Federal Reserve raising interest rates further is “now very limited.”

Euro zone business output maintained solid growth in May for a fifth straight month, though at a slower rate, according to S&P Global and Hamburg Commercial Bank’s flash Composite Purchasing Managers’ Index.

The survey showed a decline to 53.3 in May from 54.1 in April. A figure below 50 indicates a contraction.

It highlighted a “near-stalling of new business inflows” and widening divergence between the services sector, which is growing strongly, and manufacturing, where factory output is declining.

PMI figures also out Tuesday showed a similar disparity in Germany, where overall business output grew month on month but manufacturing experienced a downturn. In France, there was a “softening of demand conditions” that also hit services.

— Jenni Reid

Swiss private bank Julius Baer fell 8.15% in early trade after its quarterly results missed expectations.

Assets under management edged up 1% to 429 billion Swiss francs ($476 billion) as it saw a slight rise in net money inflows, but took a hit from currency conversions as the franc strengthened against the dollar.

The bank said in a statement that the first quarter had been a “challenging backdrop for wealth managers” but that its “capital position and balance sheet liquidity were further reinforced from the already solid levels reported at the end of 2022.”

European stocks were lower in early Tuesday trade, with the Stoxx 600 index falling 0.34% after a directionless Monday.

Germany’s DAX fell further still from the record high it hit Friday, down 0.13% on the previous session. France’s CAC 40 dropped 0.4%, while the U.K.’s FTSE 100 was down 0.18%.

Travel saw the biggest fall by sector, down 0.7%.

Shares of several global commercial property companies are set to decline further, according to chief investment officer Patrick Armstrong.

Armstrong, who manages equity strategy at wealth manager Plurimi, revealed that he is shorting four global commercial property companies.

“It’s an expensive company, in my opinion, that’s facing a pretty toxic environment,” he said about one of his shorts.

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— Ganesh Rao

President Joe Biden and House Speaker Kevin McCarthy spoke to reporters around when they were scheduled to meet about the debt ceiling.

Biden said he was hopeful about progress and emphasized the need to ensure tax loopholes are closed so wealthy people pay a fair share of taxes. McCarthy said he was looking forward to finding common ground, after saying earlier in the day that decisions have to be made at the meeting.

Investors have been watching for updates on progress out of debt ceiling negotiations amid concerns for what a default could mean for the economy.

— Alex Harring

Treasury Secretary Janet Yellen has just released a new letter to congressional leaders with updated guidance on the earliest date that the U.S. could be at serious risk of a debt default.

The date remains June 1 in the new letter, the same date it’s been since the start of May. But the new message contains two key differences from a very similar letter Yellen penned on May 15.

“With an additional week of information now available, I am writing to note that we estimate that it is highly likely that Treasury will no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by earlyJune, and potentially as early as June 1,” writes Yellen.

The phrase “highly likely” is new. Last week Yellen wrote that it was merely “likely.”

Yellen also removed an entire sentence from last week’s letter that said emergency measures Treasury is currently taking could help to push that June deadline out.

“The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates,” read Yellen’s May 15 letter to congressional leaders.

The new letter comes as President Joe Biden is about to meet face to face with House Speaker Kevin McCarthy, part of an increasingly urgent effort to reach a bipartisan compromise deal.

— Christina Wilkie

Philip Ripman manages the $1 billion Storebrand Global Solutions fund, with a focus on sustainability. But as well as green energy stocks, he also invests in chipmakers, cybersecurity stocks, pharmaceuticals and more.

His strategy appears to have paid off over the long term: his fund ranks top for 10-year annualized returns (15%) on Morningstar’s list of global mega-cap equity funds.

Here are three tips on investing sustainably, including how to play the renewables theme, according to Ripman.

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— Weizhen Tan

European markets are expected to open higher Tuesday.

The U.K.’s FTSE 100 index is expected to open 12 points higher at 7,785, Germany’s DAX 15 points higher at 16,241, France’s CAC 8 points higher at 7,482 and Italy’s FTSE MIB 34 points higher at 27,376, according to data from IG.

There are no major earnings releases. Data releases include preliminary purchasing managers’ index figures for the euro zone in May. The data measures manufacturing and services activity in the bloc.

— Holly Ellyatt