Midday market 05/12: Macro pessimism continues as debt ceiling deal not reached

Biden and McCarthy leave Washington before reaching debt ceiling increase agreement

• Yellen has notified US Congress that the government may not be able to pay debts as soon as 06/01 if debt ceiling not raised

• Negotiations will continue next week after today's afternoon meeting between the two sides is canceled

Consumer confidence index continues to fall early May with inflation expectations hitting highest since 2008

• Inflation expectation index for next 5-10 years hits +3.2%

• Consumer confidence index drops to 57.7, lowest since November, showing continued pressure on consumers

Import-export price index unexpectedly drops sharply in April, raising deflation warnings

• Import-export price index drops -4.8% and -5.9% YoY, clearly showing collapse in input prices

• Many experts believe China's reopening will create momentum for credit impulse to boost consumer demand, pulling up export prices:

• However, China's reopening activities continue to face many issues as economic activity and shopping demand continue to show that the government's efforts to create credit impulse have not been as successful as expected