The US Downgraded by Fitch | SP500 and Tesla Turning South for Longer?

The US Downgraded by Fitch | SP500 and Tesla Turning South for Longer?
August 2, 2023

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.

Daily Chart