Fitch downgrades U.S. after ''repeated debt limit standoffs'' >>> $33trn pile of debt and growing exponentially, cost of financing through the roof etc... the surprise is how long it took to downgrade, US state and local governments just experienced the worst decline in income tax revenues ever recorded
Quite important as the US was split rated with Fitch & Moody’s at AAA and S&P at AA+ , which meant that despite the 2011 S&P downgrade, the US was still a AAA country. But now with the downgrade overnight, it is no longer the case
"In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years"
Saudi borrowing costs hit record, threatening Crown Prince MBS’ Vision 2030, Saibor moves above 6%, potentially hitting Saudi businesses >>> same problem
Russia targeted Odesa region port infrastructure, Ukraine says - Izmail port hit in Russian drone attack, The UK foreign secretary has accused Russia of hitting "a new low" by "deliberately burning food stocks" while millions of people are "struggling to eat"
Prices for luxe Swiss watches like Rolex, Patek Philippe, and Audemars Piguet are approaching a 2y low on secondary markets (after a huge rally in previous years..)
Donald Trump: Ex-US president charged with plotting to overturn 2020 election defeat
The average price of a used Tesla is now over $25k lower than its peak price from last July. That's a 37% decline to $42,785, a new all-time low (good news! finally some ok 2nd hand EV prices!)
FED’s Bostic Urges caution with more hikes as inflation recedes
China's cyberspace watchdog CAC issued a draft regulation on mobile services for juveniles, to extend the scope of control to hardware. For users aged 8 to 15, mobile devices should be set to default to a total usage time of no more than 1 hour
Markets :
EURUSD 1.0950 area trends line support a must hold for EURO bulls, sell CROSSJPY's, TP on longs, tactical short from here
GOLD 50dma around $1950 a must hold for the bulls on weeklies
NQ and SPX500 uptrends very 'stretched' - see Saxo charts below, Asia was down quite sharply again overnight
Markets been too quiet, low vols, AI momentum driven rally, 'mem' stocks joined in etc.. and a surprise came about, US rating downgrade, many will claim it doesn't matter...let's see, IMHO, it does with 33trn of debt and growing..Yellen is right, it is based on old data, correct >>> the cost of financing debt is not 500bn but it is now $1trillion yearly..!!
It's always some else's fault.. fact it, here we are.. Biden team: US credit rating decision 'bizarre' - and it's Trump's fault - CityAM
SUMMARY OF FITCH'S U.S. CREDIT RATING DOWNGRADE: Fitch downgrades U.S. long-term credit rating from AAA to AA+ for the first time since 2011. Here's why:
1. Erosion of Governance: Repeated debt-limited political standoffs have eroded confidence in fiscal management
2. Rising Government Deficits: Fitch expects the deficit to rise to 6.3% on GDP in 2023 from 3.7% in 2022
3. General Government Debt Rising: Fitch expects further increases in debt-to-GDP going forward
4. Unaddressed Medium-Term Fiscal Challenges: Rising rates are resulting in an increase in interest costs and tax cuts set in 2017 are set to expire in 2025, adding political pressure
5. Fed Interest Rate Hikes: Fitch expects one more rate hike by September which adds more pressure on ratings Fitch made it clear that failure to address governmental spending issues and macroeconomic policy could lead to MORE negative revisions.
Technical analysis SP500 Nasdaq100 uptrends stretched correction looming | Saxo Group (home.saxo) >> Summary: Uptrends in S&P 500/US500 cfd and Nasdaq 100/USNAS100 cfd are very stretched and charts are showing top and reversal patterns. Combined with divergence on indicators a correction should be expected.
Key supports to be observed
Nicely put together - market update, charts etc The Week in Charts (7/31/23) - Charlie Bilello's Blog
The last one that tips a few things over the edge..
NASDAQ - overdone
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