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Debt ceiling talks hit a roadblock, Jupiter says two-year Treasuries are the US’s most dangerous bond, and DeSantis is to unveil a leadershi [View in browser]( [Bloomberg]( Debt ceiling talks hit a roadblock, Jupiter says two-year Treasuries are the US’s most dangerous bond, and DeSantis is to unveil a leadership bid in Musk livestream. — [Liza Tetley]( Stumbling block In another curveball for the market, [House speaker Kevin McCarthy left the Capitol late Tuesday saying the two sides had yet to reach a deal]( over the US debt ceiling, and one of his chief negotiators added there are no more meetings planned. The impasse means it’s likely the House and Senate will both have to vote on any deal next week, mere hours before Treasury Secretary Janet Yellen has said the US could run out of cash. The standoff is weighing on global stocks as investors seek haven assets. Shorting bets [Two-year Treasuries are the most dangerous US bond, according to Mark Nash, who oversees Jupiter’s Strategic Absolute Return Bond Fund](, which has beaten 91% of its peers over the past five years. He’s shorting the securities in a bet that markets are wrong that the Federal Reserve will cut rates this year — one of the most hotly contested topics in global markets currently. Nash thinks policymakers will have to hike in June and keep rates elevated to ensure heated prices are sufficiently quashed. DeSantis bid Florida Governor[Ron DeSantis will announce his 2024 presidential campaign bid on Wednesday evening, in a Twitter Spaces livestream with Elon Musk](, according to people familiar — potentially a hint at how he plans to orient himself around the culture war issues that have dominated his tenure as governor.  Though he is seen as the toughest potential rival to former president Donald Trump, his campaign would start weakened by eroding polling numbers, withering attacks from Trump and self-inflicted missteps. He’s expected to have a formal public kickoff the week of June 1. Anxious markets Contracts on the S&P 500 and the Nasdaq are lower today amid fresh concern around progress on debt ceiling talks. The former is trading around 0.4% lower this morning, while futures on the tech-heavy gauge hover around 0.3% as at 6:50 a.m. in New York. Two- and three-year Treasury yields are continuing to climb on US default anxieties, while the rest of the curve is pretty flat. A measure of the dollar is little changed, while oil prices continue to advance. Gold prices are gaining as traders look for havens. Coming up… Again, a thin Fed speakers agenda today, with just Waller at 12:10 p.m. The central bank will also publish its May meeting minutes at 2:00 p.m. On the data front, we’ll get US MBA mortgage applications at 7:00 a.m., EIA US crude oil inventories at 10:30 a.m. At 11:30 a.m. the US will sell $22 billion 2-year FRNs and $42 billion 17-week bills, and another $43 billion 5-year notes at 1:00 p.m. Earnings include Nvidia, Analog Devices, Kohl's, American Eagle, Snowflake, and Splunk. Will S&P 500 rally or slide? How long before the index climbs back to its 2022 peak? Will value stocks will outperform growth? Or, maybe, it's time to look past stocks and into alternatives? Share your views in our latest [MLIV Pulse survey](. What we’ve been reading Here’s what caught our eye over the past 24 hours: - [ is still killing at least one person every four minutesÂ]( - [Brazil’s Lula da Silva is lashing out at central bankers]( over rate hikes - [UK inflation proves stubborn in April]( boosting bets around higher rates - [London employees are working in the office for less than half the week]( - [Copper is spiraling lower on fears that Chinese]( demand will underwhelm - [New Zealand raised rates and unexpectedly signaled no further hikes]( - [What’s next for Russia after the battle for Ukraine’s Bakhmut?](bbg://news/stories/RV5NR9TVI5MO) And finally, here’s what Joe’s interested in this morning Investors may be getting a tad anxious about the debt ceiling in the last couple days. But by and large, there are very few signs of panic anywhere. Even with elevated short-term rates, indicating a possibility of actual missed interest payments, you just don't see much signs of worry elsewhere. And yet obviously it's top of mind for a lot of people. All kinds of analyst notes, and conference calls, and chatter about *what if* it doesn't get raised. Republican Representative Patrick McHenry said his "texts are a dumpster fire" with Wall Streeters [messaging him over the state of negotiations](. So there's clearly concern, but nobody wants to put their money where their mouth is. Someone else can do the selling. In fact it's kind of a problem for the administration. One hope out there is that the market panics, and that the market panic services as a forcing mechanism for bringing the two sides closer together. But so far that's not happening. Meanwhile, what's interesting to me is that outside of the debt ceiling, the US economy seems to be chugging along just fine. And while there's something of an expectation for a pause at the next Fed meeting, if you accept the premise that we need to see more weakening in order to get inflation down to target, it's kind of hard to see where that's going on. The Bloomberg Economic Surprise Index is around its highest level in over a year. The one area of weakness we consistently see in the data is in the business surveys like from the regional Feds and such. They've all been pretty awful. And yet when you peak under the hood, you don't see much actual changes in the business dynamic. Yesterday we got the [Philadelphia Fed Non-Manufacturing Survey](, and it was very representative of the overall vibe. The headline number was -16.0, so really rough. And yet the employment sub-index actually improved, New Orders improved, and businesses continue to expect pricing power and hot inflation. [We also got the S&P Flash PMI for May yesterday](, and again similar story. US output growth is at a 13-month high, with services much stronger than manufacturing. Meanwhile, today S&P Global says that G4 output in general is at its highest level in 11 months, and that price pressures are on the rise. So there's sort of two conclusions here. One is that assuming they get a deal on the debt ceiling, that isn't too disruptive economically or financially, it's hard to see much change in trajectory right now to the US growth picture. And two, if you are under the assumption that we need to see a real slowdown in order to get inflation under control (and of course, there's dispute on this) then a pause may not be the end of the hiking cycle. Oh, and I was doing my daily scanning of looking through earnings conference calls to see if there are any interesting nuggets. We're in kind of a fallow period right now, but on the Urban Outfitters call yesterday, CEO Richard Hayne said in his prepared remarks: "We currently see no signs of change in customer behavior, no indication that customers are shopping less frequently, buying pure items, or trading down. Indeed so far in May, total retail segment comps are in line with the first quarter results, and we believe the total retail segment comps in Q2 could look very similar to Q1 print." Follow Bloomberg's Joe Weisenthal on Twitter @TheStalwart. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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