Market Sentiment Sees a Slight Dip Following Moody’s Move
US stock futures signaled a weaker opening today, which could result in a downward movement of the markets following the strong comeback on Monday. The decline in the futures was small and it was related to the Moody’s news of striking the United States off its highly wanted AAA credit rating. However, it was this downgrade that caused confidence, which saw stocks spiking on Monday as the S&P 500 concluded its sixth straight win.
Market participants exhibited a very little amount of concern towards the cuts and they were very dismissive of the news as expected. Larry Adam, chief investment officer at Raymond James, stated that the downgrade didn’t present a new story; the U.S. fiscal trend of deficit and debt has been on the sustainability watch list for quite a while. This is also the reason why the announcement of the cut was not such a big surprise to the market.
A Detailed View of the S&P 500 and Market Sentiment
The S&P 500 has been the subject of a bull run, being close to 3% away from its highest mark. However, the futures of the major indices at 6 a.m. ET indicated a more wary market. The Dow futures saw a fall of 0.21%, the S&P 500 futures faced a decline of 0.37%, and the Nasdaq futures dropped by 0.47%.
Although the initial impact of the credit rating cut on the investor mood is fairly insignificant, the focus of market participants is more on the global economic environment and business profits in order to form the overall direction of the markets in the future.
Corporate Earnings and Upcoming Reports
Most of the large companies, with the earnings season near an end, have successfully reported their quarterly results. Nevertheless, the situation is about to change as some important earnings reports are still due. Home Depot, the retail titan, is the first in line to announce their earnings before the stock market opens today, while the report of Toll Brothers, a construction company, will be made known only after the market has already closed.
Recognizing the upcoming week, those hoping for good news from the company of one of the largest physical retailers (Target) will be eager to find out about the results as it’s likely that sales performance will continue to lead the economic recovery.
Cryptocurrency Legislation Makes Headway in the Senate
Another topic discussed in the finance world this week is the Senate’s recent green light for a far-reaching cryptocurrency bill that targets regulating stablecoins in the digital money market. These quite an established class of crypto assets are the controversy in the coin world as they possess at least one advantage of being blockchain-secured and are backed by the U.S. dollar.
Having 66 out of 32 votes in favor, the bill, thus, cleared the Senate floor, raising the prospects of its possible adoption as a law. This is a key event that proves the industry’s surging technology and market growth, as this is the first major piece of legislation for the stablecoin sector in the world’s largest cryptocurrency market.
