Concerns over the US government’s debt and deficit, exacerbated by Moody’s credit rating downgrade, fueled a broad market sell-off Wednesday. Weak demand at a 20-year Treasury note auction, resulting in higher yields, underscored investor anxieties. This, coupled with the advancement of a potentially deficit-increasing tax bill, further pressured stocks, bonds, and the US dollar. The Dow plummeted over 800 points, marking the worst day for major indexes in a month, while the CBOE Volatility Index spiked significantly.
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Moody’s recent downgrade of JPMorgan Chase (JPM), Bank of America (BofA), and Wells Fargo follows a similar action taken against the US credit rating. This move sends ripples throughout the financial world, raising questions about the stability of major American banks and the implications for ordinary citizens. The timing of the downgrade, coming on the heels of a US credit rating cut, underscores a growing concern about the overall health of the American economy.
The rationale behind Moody’s actions isn’t explicitly stated, but it’s reasonable to infer that the downgrade reflects a broader assessment of increased risk within the US financial system.… Continue reading
Moody’s downgrade of the U.S. credit rating to Aa1 from Aaa sent Treasury yields sharply higher on Monday, with the 30-year yield reaching 5.03%, its highest level since November 2023. This increase, driven by investors selling bonds, saw the 10-year yield climb to 4.513% and the 2-year yield rise to 3.993%. The downgrade cited rising government debt and interest payments as contributing factors, mirroring a similar situation in 2023 when tariffs caused a comparable yield spike. Consequently, stock futures fell significantly.
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John Q. Hosedrinker 
Matt Underwood