There was some good news related to the US deal to raise the debt ceiling since it went successfully through the House of Representatives committee yesterday. But it still needs to pass both the House and the Senate this week before it becomes law. The suspense is weighing on investors sentiment, as a failure to pass the deal would mean that a US default could come as soon as June 5.

Also weighing on the mood, a survey from Lloyds published today showed business confidence fell by five points in May to 28%, the first fall in three months.

Optimism about the wider economy fell by six points to 22%, as 48% of companies (down from 53%) were more positive while 26% (up from 25%) were more negative. “This month’s decline may reflect firms having already accounted for the more upbeat economic news in recent months”, Lloyds said.

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, noted: “As the economic environment remains challenging, compounded by stubborn inflation and higher wage pressures, business confidence has dipped slightly this month as firms feel cautious about the wider economy and their own trading prospects.”

Among stocks, Entain fell more than 2% after it said it faced a financial penalty by Britain's tax authority.

 

Things to read today:

‘Confidence is a big problem’: China’s economic recovery loses steam (Financial Times)

JPMorgan Builds Unit for World’s Richest Families in Wealth Bet (Bloomberg)