Australia and the US sign critical minerals agreement

The S&P 500 finished little changed on Monday as Wall Street awaited a pivotal debt ceiling meeting and government officials scrambled to avert a default.

Monday’s moves brought the tech-heavy index to its highest close and highest intraday level since August.

President Joe Biden and House Speaker Kevin McCarthy are set to meet Monday at 5:30 pm ET to continue debt ceiling talks, with just 10 days left before the earliest date that Treasury Secretary Janet Yellen said the US could realistically default. Veteran negotiators on both sides resumed talks Monday morning in the Capitol, but mandatory government spending cuts remain a major obstacle. Republicans insist on paring back spending to baseline 2022 levels, but Biden said that any cuts across the board without additional tax hikes are out of the question.

Overall, the benchmark index inched 0.02 per cent higher to finish at 4,192.63, while the Dow Jones Industrial Average lost 140.05 points, or 0.42 per cent, to end at 33,286.58. The Nasdaq Composite gained 0.5 per cent to settle at 12,720.78.

Major averages are coming off a winning week. Led by technology stocks, equities continue grinding higher despite uncertainty in Washington and sticky inflation, with the S&P 500 hovering just below the 4,200 level.

While the technology trade may have further to run, some on Wall Street say stronger market breadth is needed for a rally to continue longer term.

The release of Fed minutes on Wednesday from the May meeting could shed light on how central bankers are thinking about the possibility of further rate hikes.

First-quarter earnings season is winding down, but notable reports loom from Zoom Video, Lowe’s and Dick’s Sporting Goods.

Ironwood Pharmaceuticals said on Monday it would buy Switzerland-based drug developer VectivBio Holding AG for $1.15 billion, adding a promising treatment for digestive disorders to its portfolio. Ironwood has offered $17 per share for VectivBio, a premium of about 43 per cent to the stock's last close.

In commodity news, The Climate, Critical Minerals, and Clean Energy Transformation Compact signed between US President Joe Biden and Australian Prime Minister Anthony Albanese highlights the importance of Australia's critical minerals in the global energy transition. The deal establishes climate and clean energy as a central pillar of the Australia-US alliance, emphasising the role of critical minerals like lithium and cobalt in clean energy technologies. The compact aims to leverage US capital and create reliable global access to critical minerals while promoting the growth of Australia's critical minerals sector and creating economic opportunities and sustainable supply chains.

SQM and Ford Motor Company have entered a strategic agreement to guarantee the availability of top-notch lithium products for electric vehicle production, securing the supply of battery-grade lithium carbonate and lithium hydroxide to manufacture high-performance EV batteries, potentially enabling Ford vehicles to qualify for consumer tax credits and supporting the company's EV production plans and global expansion in the electric mobility markets.

Overall, US sectors were mixed. Communication Services was the best performer, whilst Consumer Staples was the worst.

Futures

The SPI futures are pointing to a 0.1 per cent gain.

Currency

One Australian dollar at 7:10 AM is buying 66.51 US cents.

Commodities

Iron ore futures are pointing to a 1.2 per cent fall.

Gold lost 0.42 per cent. Silver fell 1.12 per cent. Copper dropped 1.26 per cent and oil gained 0.62 per cent.

Figures around the globe

Across the Atlantic, European markets closed mixed. London’s FTSE added 0.18 per cent, Frankfurt lost 0.32 per cent while Paris closed 0.18 per cent lower.

In Asian markets, Tokyo’s Nikkei added 0.9 per cent, Hong Kong’s Hang Seng gained 1.17 per cent while China’s Shanghai Composite closed 0.39 per cent higher.

Yesterday, the Australian sharemarket closed 0.22 per cent lower at 7263.

Ex-dividends

Amcor PLC (ASX:AMC) is paying 18.43 cents unfranked
Elders (ASX:ELD) is paying 23 cents 30 per cent franked

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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