Getting downgraded is not a good thing. Futures are lower this morning.
Fitch Ratings downgraded the United States’ long-term foreign currency issuer default rating to AA+ from AAA on Tuesday.
The downgrade was due to “expected fiscal deterioration over the next three years,” an erosion of governance and a growing general debt burden.
Fitch also highlighted the rising general government deficit, which it anticipates will rise to 6.3% of gross domestic product in 2023, from 3.7% in 2022.
The White House disagreed with Fitch’s downgrade, saying that it “defies reality.”
This isn’t the first time a rating agency has downgraded the U.S. Standard & Poor’s cut the nation’s credit rating to AA+ from AAA in 2011 after Washington managed to avoid a default.
End of the Run?
SP500 has been on a heck of run this year. This morning futures are down, which can always change by mid day. Below are charts of the SP500 on a daily and monthly perspective. Each of them look semi healthy yet on the daily we are beginning to see some rolling over ever so slightly towards the 9 day ema. On the monthly we most likely could see a pull back to the 9 month EMA, 4300 area forming the old school cut and handle.
Taking a look at charts from a longer term perspective can bring us more clarity of the intermediate term direction a index or stock is going.
Let take a look at Tesla.
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As you may know, I work with Kerry Grinkmeyer of Best of US Investors. We have launched our new website, www.BUS13.ai, go check it out!