Investors around the world are now speculating on how an initial agreement to raise the U.S. debt ceiling might affect markets, saying the deal, announced by the White House and Republicans on Saturday night, would avert a catastrophic U.S. The default has boosted overall risk appetite, but also some sectors that have lagged behind this year’s tech-led rally, such as cyclicals and small caps.
But some worry that the proposed cuts could weigh on U.S. economic growth. Meanwhile, the negotiating process to narrowly avoid a default could damage the U.S. standing with credit rating agencies.
Bob Stark, director of global market strategy at Kyriba, a financial management software provider, said that although the debt ceiling agreement reached by the White House is good news, the US government still has cash flow problems. The first step to rescue from the brink of sexual inadequacy.