US stock markets were weaker once again with the Nasdaq pushing 0.6% lower underperforming the Dow Jones, down 0.2%, and the S&P 500, down 0.1%.
US Treasury Secretary overnight sent a letter to lawmakers noting that without an increase in the debt ceiling, the Government would not be able to pay its own bills and would be forced to default.
As has been the case in every such event since 2016, the market barely moved as investors now understand that a default would only ever occur by choice, given the Fed’s ability to continue to purchase government bonds.
Defensives outperform, inefficient labour market
Energy, materials and tech stocks dragged the market lower with defensive names returning to the fore despite a weakening economy.
The Beige Book showed that growth slowed in July as the Delta variant hit, whilst record job openings of 10.9 million were offset by a fall in job hires to 6.7 million, suggesting the labour market isn’t functioning effectively.
Lululemon smashes expectations
Athleisure wear apparel maker Lululemon (NASDAQ: LULU) smashed expectations, jumping more than 10% in after-hours trade after reporting a more than doubling in both sales and profit during the quarter.
US stock market movers
These US stocks were some of the biggest movers on Wednesday:
- Global Payments (NYSE: GPN) up 7.2%
- Upstart (NASDAQ: UPST) up 4.4%
- Kraft Heinz (NASDAQ: KHC) up 3.9%
- Square (NYSE: SQ) down 4.2%
- NIO (NYSE: NIO) down 6.4%
- UiPath (NYSE: PATH) down 9.6%
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is expected to follow US markets lower at the open on Thursday. For all the latest, check out Rask Media’s ASX 200 morning report.
