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MAY 16, 2023

CRYPTOS DECLINE

Although Bitcoin has had a successful run this year, its prices have dropped again, and recent losses indicate that its rally may have slowed down. Analysts say that Bitcoin appears to be consolidating around $27,000 in the short term, however, there is still a downside risk after breaking this support level last week. Furthermore, Bitcoin could reach $25,000 if it breaks below the $26,000 support level. Meanwhile, Ether, Dogecoin, Shiba Inu, and other small altcoins also followed this trend as they saw declines in value.

YELLEN WARNS DEFAULT RISK

The U.S. Treasury Department has recently stated that without a debt limit increase, it will have trouble paying the bills by June 1st, which could be the first-ever U.S. default. Treasury Secretary, Janet Yellen, confirmed that it is unlikely for the agency to meet the payment obligations by early June, putting pressure on the White House and congressional Republicans to reach an agreement soon. Yellen warned that failure to raise the federal debt limit could lead to a “constitutional crisis” and a catastrophic effect on the U.S. and global economies. Yellen noted that prompt action is needed, warning that waiting until the last minute could cause serious harm to business and consumer confidence, and negatively impact the U.S. credit rating.

U.S. DEBT CEILING NEGOTIATIONS RESUME

Negotiations on the U.S. debt ceiling are set to resume today, with President Joe Biden scheduled to meet House Speaker Kevin McCarthy and other top congressional leaders. The discussions have been ongoing since last week, with representatives from both sides working daily in an attempt to reach a deal before the June deadline. While Biden has recently expressed optimism about reaching an agreement, McCarthy still believes that they are far apart in their positions. Lifting the debt ceiling is crucial for the government to cover its spending commitments and avoid default, nevertheless, House Republicans have indicated that they will not agree to raise the limit without commitments of future spending cuts.

OIL PRICES FALL

Oil prices have recently decreased as China reported weaker-than-expected economic data. The International Energy Agency (IEA) had forecasted an increase in global oil demand of 200,000 barrels per day, however, this positive outlook was overshadowed as China’s economy appeared to be losing momentum based on its latest economic data. Despite this, some of China’s oil refineries processed near-record levels of crude – even with ongoing maintenance-related pauses, and it is believed that the recent losses are likely attributed to a focus on past data rather than future projections.

HOME DEPOT LOWERS OUTLOOK AS SALES DROP

Home Depot, one of the leading home improvement retailers, has reduced its outlook for the year after reporting a larger-than-expected drop in sales during the first quarter. The company now predicts a potential decline of up to 5% in comparable sales for the year, representing a significant decrease in consumer spending compared to its previous forecast. Home Depot’s CFO, Richard McPhail, suggested that the company is experiencing a widespread reduction in consumer discretionary spending, possibly due to tighter monetary policies and borrowing conditions.

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