Jeff Sika, the founder of the circle square alternative investment, discussed that Moodys rating cut means interest rates on Veni & Co..
Morgan Stanley’s top stock market strategist said in a note that anyone stock market crash It is associated with the downgrade of the US credit rating moody, possibly a purchase scenario for the firm.
Mike Wilson, the strategist of Morgan Stanley’s main stock market, said in his weekly research note that the temporary deficiency of tariffs between the US and China was an item that could lead to a more sustainable rally. After Moody’s downgrade, a stock market will have an opportunity to decline Buy dip,
Wilson said that the equity-Return-to-brand-gentle correlation is currently close to 1 to 1. “In our view, a breakout of a 10 -year yield above 4.50% will negative the correlation, and run higher rate sensitivity to equity,” he said.
Wilson wrote, “It is also worth considering this conversation on the late downgrade of Moody of US Credit Rating last Friday, although Moody’s is the last rating agency downting the US credit rating, a process that began 14 years ago in the summer of 2011,” Wilson wrote.
Moody’s on rising loans dows the US credit rating
Morgan Stanley’s chief market strategist said that Moody could offer an opportunity to buy a stock dump on Dowgrad. (Shannon Stapletton / Reuters / Reuters Photos)
“In short, a brake above 4.50% in a 10-year yield can lead to a slight assessment compression (around 5% compression we will get in pre-historical analogs)-We will be buyers of such dip,” he said.
Wilson’s note said that Morgan Stanley Economist A durable market rally has less optimistic about two other items on its checklist for a durable market rally, including conditions that allow the Federal Reserve to initiate interest rate cuts and start a low yield on a 10 -year treasury note.
Treasury Secretary Besant rejected Moody’s US Credit Downgrade as ‘Lagging Indicator’
Treasury Secretary Scott Besent dismissed the downgrade as an interval indicator for the economy. (Nathan Howard / Reuters / Reuters Photos)
Firm’s forecast project that is the main individual consumption expenditure (PCE) index, a key Inflation gaugeIt is estimated to increase in May and the summer continues to increase. The core PCE was 2.6% in April while the standard PCE index was 2.3% last month – both figures are above the 2% target rate of the Fed.
“In short, we are unlikely to look at the proof of the last two items in our check list for more continuous rally-one more Dowish fed And a 10 -year yield below 4.0% without recession data, “Wilson wrote.
The CBO says that to widen the US budget deficit, the national loan to increase by 156% of GDP
Moody’s downed the US credit rating on rising national debt. (Through Saul Loaib / AFP Getty Image / Getty Image)
Moody’s rating downed a notch to the US credit rating from the top level of AAA to AA1 on Friday, stating that the step “reflects an increase of more than a decade over a decade. Government loan And the interest payment ratio for those levels that are much higher than the equally rated sovereign. ,
The firm said, “Continuous US administration and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficit and rising interest costs.” “We do not believe that compulsory expenses and losses in losses will result in the result of current fiscal proposals under consideration on the lack of multi-year.”
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Moody said that it sees the federal government’s fiscal view deteriorating in the years ahead Spending on eligibility programs Medicare and social security continue to increase amid interest payments on loans due to aging of America’s population and increasing high interest rates and deficit.
