US debt ceiling resolution - Start of new bull market?

Thoughts on what the markets have been doing lately.

FINANCETRADINGINVESTING

Lillaney, RTI For Money

5/30/20231 min read

M&M Chart
M&M Chart

I believe that the US debt ceiling resolution will start a new bull market. Why?


Because bull markets are driven by liquidity and the resolution of the US debt ceiling will provide that liquidity to the markets.


The amounts are staggering.


The current limit stands at $31.4 trillion and is expected to reach $50 trillion by 2030.


Some of this liquidity will find its way into the markets.


Also, inflation seems to have reached a peak which should encourage the Fed to hold and eventually reduce rates in their upcoming meetings.


Lower rates are good for business and hence for markets.


The markets in India seem to be anticipating all this and acting accordingly.


Sensex closed just 1% below its 52 week high after the US debt ceiling issue was solved over the weekend.


The best performing stock in the Sensex was M&M which is trading close to its 52 week high of 1391.95


Nifty closed just 2% below its 52 week high after the US debt ceiling issue was solved over the weekend.


14 large cap stocks hit a new 52 week high.


3 of the 14 large cap stocks are banks (AU, Indus, IDFC) and 2 are from the FMCG (ITC, Godrej Consumer) sector.


18 mid cap stocks hit a new 52 week high.


3 of the 18 mid cap stocks are financials (Equitas, Sundaram, L&T).


The 52 week high list seems to be growing with each passing day.


I think this is the right time to start creating your equity portfolio if you don’t have one already.


If you already have a portfolio it should be modified to include the new leaders.


Also, in the US markets, NVIDIA is trading at an all time high and is expected to be the market leader of the upcoming bull market as it is a key player in the field of AI.


Am very excited to see how this will play out and hopefully be a part of it.