US actions manifest in the midst of tariff relief and inflation optimism
Securities markets in the United States (USA) ended last week with a high note after the United States and China agreed to significantly revert tariffs for 90 days. The consumer price index (CPI) data and the producer’s price index (IPP) (PPI) (PPI) reinforced the reinforced expectations for the possible trimming of interest rates of the Federal Reserve (FED) at the end of this year.
During the week, US Tech 100 (Nasdaq 100) increased 6.97%. The US 500 (S&P 500) earned 5.27%. Thewall Street (Dow Jones) added 1405 points, or 3.4%.
Moody’s reduces the United States credit rating
In Friday, Moody’s reduced the United States credit rating to ‘AA1’ from ‘AAA’, citing the growing levels of government debt. The reduction occurs when Congress progresses to President Trump’s tax bill. This legislation includes reductions from permanent tax rates and temporarily eliminates taxes on tips and overtime. while the debt roof increases by $ 4 billion.
Moody’s is the last of the three qualification agencies of the great three to degrade the United States after Standard and Poor’s in 2011 (from AAA to AA+) and Fitch in August 2023 (from AAA to AA+).
Market reaction and economic ideas
The consequences have resulted in risk aversion flows to start the new week:
- US 500 Futures have fallen 0.75% to 5931
- US Tech 100 futures are quoting 1.07% lower than 21,280
In the fixed income market, the yields from the medium to the length of the US rates curve are pressing higher and more intermittent warning signals:
- The 10 -year performance rises 4 basic points (BP) to 4.49%
- The performance of the 30 years is quoting 6 PB higher than 4.97%, observing the year until the year until the year.
Commercial ads on the horizon
Looking to the future, President Trump has said that he plans to announce the rates of fees for US commercial partners within the next two or three weeks, while indicating that the union of the United States and Europe (EU) have started “serious commercial conversations.” Meanwhile, US and Japanese finance ministers are scheduled to meet this week to continue commercial discussions, which seemed to have stagnated.
In the Data Front, the readings of the Flash (PMI) purchase managers index will be observed to obtain information on economic uncertainties and possible price -related price pressures, although given the reversion last week in the rates, these readings will probably be considered outdated.
Target, Home Depot and Lowe’s profit reports will focus after Walmart’s warning last week about possible price increases due to high rates.
