Market MakeHer Podcast 11. Stock Market Update: Earnings, Fitch Downgrade and Swiftenomics
Aug 9, 2023
The recent Fitch downgrade of US sovereign debt sparks an insightful discussion on its market implications. Key economic indicators like CPI and PPI play a crucial role in shaping investor sentiment and Fed decisions. Strong earnings reports from various sectors defy expectations, hinting at consumer resilience. The concept of Swiftenomics reveals how major concerts influence spending, while job growth in healthcare signals potential investment opportunities. Ultimately, the consumer's health remains central to understanding market dynamics.
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Sovereign Rating Downgrade And Market Reaction
- Credit rating agencies rate countries like companies and a downgrade can trigger forced selling by rule-bound indexes.
- Fitch downgraded U.S. sovereign debt to AA+ citing 'erosion of governance' similar to S&P's 2011 action.
Buffett Bought Treasuries While Ackman Shorted
- Jess contrasts Warren Buffett buying $10B of treasuries with Bill Ackman shorting U.S. debt to show differing investor reactions.
- This frames the downgrade as a debate between two famous investors' macro views.
Market Focuses On Earnings Not Ratings
- The market largely shrugged at the downgrade because it prioritizes earnings and forward-looking inflation data.
- Investors care more about whether inflation and the consumer remain resilient than credit agency rhetoric.