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Wall Street ends down after Fitch U.S. rating downgrade



The downgrade follows a turbulent period in the U.S. including protracted battle over the debt ceiling and the size of the nation’s debt

Wall Street experienced a downward trend on Wednesday, with both the S&P 500 and Nasdaq Composite registering losses for the second consecutive day following rating agency Fitch downgrading the U.S. government’s credit rating.

Fitch’s downgrade lowered the United States’ rating from AAA to AA+, citing concerns about expected fiscal deterioration over the next three years and the rising government debt. This marked the second major agency to cut the country’s rating, following Standard & Poor’s downgrade in 2011.

As a result of the news, rate-sensitive megacap stocks like Tesla, Nvidia, Meta Platforms, and Apple all experienced declines, mainly due to the rise in the yield on U.S. 10-year Treasury notes to its highest level in nearly nine months.

The technology index suffered the most significant setback, dropping by 2.6% and emerging as the worst-performing sector among the 11 major S&P sectors. Nine sectors, in total, ended the day in negative territory.

The Dow Jones Industrial Average fell by 348.16 points (0.98%) to close at 35,282.52, while the S&P 500 lost 63.34 points (1.38%) to finish at 4,513.39. The Nasdaq Composite experienced a sharp decline, dropping 310.47 points (2.17%) to reach 13,973.45.

Amidst concerns of a potential recession, the ADP National Employment report brought some optimism as it indicated that private payrolls increased more than expected in July, signalling continued resilience in the labour market, which could act as a buffer for the economy.

Despite lingering fears about a recession, corporate America’s performance has been robust.

With approximately two-thirds of the S&P 500 companies having already reported their earnings, an impressive 79.9% of them have exceeded analysts’ expectations, as reported by Refinitiv I/B/E/S. This performance has set the quarter on track for the highest earnings beat rate since the third quarter of 2021.

In terms of specific company earnings, CVS Health Corp gained 3.3% after surpassing Wall Street estimates for quarterly profit. Similarly, Emerson climbed 3.8% after the industrial software firm raised its annual profit outlook.

However, not all companies experienced positive results. Advanced Micro Devices (AMD) saw a 7% decline due to concerns about ambitious targets for an artificial intelligence (AI) ramp-up. These worries overshadowed the chip designer’s otherwise optimistic forecast for the year’s end.

The overall trading volume on U.S. exchanges reached 11.88 billion shares, exceeding the 10.79 billion average for the last 20 trading days.

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What will it take for the Fed to cut rates?



Leading economists anticipate a potential shift in the Federal Reserve’s monetary policy, shedding light on the timeline for an interest rate reduction.

Financial experts and analysts have closely examined economic indicators, which suggest that a change in the Fed’s stance may be on the horizon. Factors such as inflationary pressures, employment rates, and GDP growth have all been scrutinized to ascertain when the central bank might decide to cut interest rates.

The consensus among these experts is that a rate cut could occur within the next six to nine months. They point to the Federal Reserve’s commitment to maintaining a flexible approach, adjusting policies as needed to support economic stability. With inflationary concerns still looming and the labor market showing signs of recovery, the timing of a potential rate cut remains a key topic of discussion among financial circles.

The Federal Reserve’s decision on interest rates can have a profound impact on financial markets, investments, and borrowing costs. As such, investors and businesses are keeping a keen eye on developments in this regard, preparing for potential changes in their financial strategies.

Kyle Rodda from spoke with Ticker’s Ahron Young. #featured

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Bank accidentally deposits $86M into client’s account



A financial institution mistakenly deposited over $86 million into a client’s account, causing shockwaves in the banking industry.

The error came to light when the client, a small business owner, checked their account balance and discovered the astronomical sum. It is being hailed as one of the most significant banking errors in recent memory.

The client, who wishes to remain anonymous, reportedly contacted the bank immediately upon noticing the massive windfall. Bank officials were left scrambling to rectify the error, which has raised numerous questions about the institution’s internal controls and safeguards.

The client’s account, initially holding just a few thousand dollars, suddenly displayed a balance that could buy luxury yachts, mansions, and more.

The incident has prompted investigations by regulatory authorities to determine how such an egregious error occurred in the first place.

While the bank has issued an apology and assured the client that the funds will be corrected to the proper balance, it remains unclear how this mistake could have happened on such a colossal scale.

The financial institution may also face potential legal consequences for the error, as well as reputational damage that could impact its future business.

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Tech giants drive global mega-cap surge amid inflation relief



Tech giants have taken the lead in propelling global mega-cap stocks to new heights.

This surge comes as a welcome relief for investors who have been closely monitoring the impact of rising inflation on the financial markets.

The tech sector, including giants like Apple, Amazon, and Microsoft, has been instrumental in driving the rally. These companies have reported robust earnings and strong growth prospects, which has boosted investor confidence. As a result, the market capitalization of these tech behemoths has reached unprecedented levels, contributing significantly to the overall rise in global mega-cap stocks.

The easing of inflationary pressures has played a pivotal role in this resurgence. Central banks’ efforts to tame inflation through monetary policy adjustments have begun to bear fruit, reassuring investors and stabilizing financial markets. As concerns over rapidly increasing prices recede, investors have become more willing to invest in mega-cap stocks, particularly in the tech sector, which has demonstrated resilience in the face of economic challenges.

Will the tech giants maintain their momentum and continue to lead the mega-cap surge, or are there potential risks on the horizon?

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