[Platinum Insights] (5.22.23)

Good morning  

U.S. stock index futures remained nearly flat in the early hours of Monday, just ahead of the discussions about raising the debt ceiling. Less than two weeks remain before a June 1 deadline after which the Treasury warned that the federal government will struggle to pay its debts, triggering a default that would cause chaos in financial markets and spike interest rates.  

Investors also look ahead to a slew of US economic reports this week including a second reading for first quarter GDP and the personal consumption expenditure inflation gauge.  

Micron’s shares fell 6% in premarket trading after China barred it from selling memory chips to key domestic industries, also ramping up trade tensions between Beijing and Washington. Shares of other semiconductor companies also fell. Meta Platforms Inc slipped 1.1% after the European Union privacy regulators slapped a $1.3 billion fine on the company for sending user information to the U.S. 

Bank of America strategist Savita Subramanian hiked her year-end target for the S&P 500 to 4,300 from 4,000 on Sunday evening. Subramanian said in a note that the recent focus on efficiency from major companies should help make earnings more stable going forward.  

WTI crude futures traded above $71 per barrel. Gold fluctuated around $1,975 an ounce while the yield on the US 10-year Treasury note fell by around 5 basis points to 3.66%.  

On Friday, Fed Chair Powell said that because of stress in the banking sector, it might be unnecessary to raise rates to curb inflation. Consequently, the probability of a pause in the rate hike cycle has increased, with traders currently assigning an 86% chance that the Fed will maintain steady rates in June.  

Minneapolis Federal Reserve President Neel Kashkari said on Monday it was a “close call” on whether he would vote to raise interest rates at the central bank’s meeting next month or take a pause and leave rates where they are.  

Ford Motor Co on Monday unveiled three deals for the supply of lithium products, including lithium hydroxide, as the automaker ramps up electric vehicle (EV) production to 2 million units by the end of 2026.  

JPMorgan Chase & Co’s net interest income would rise by $3 billion this year due to its purchase of failed First Republic Bank, according to a presentation published ahead of its investor day on Monday.