Morning Minutes

Stocks Digest Moody’s US Outlook Downgrade and Await Tuesday Developments

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Late on Friday, after many market participants had gone home for the weekend, a long weekend for bankers and government workers, Moody’s announced that it has cut the outlook for its US credit rating to Negative from Stable, blaming high debt loads, high interest rates and politicians’ inability to hammer out a fiscal plan with another government shutdown deadline looming.

This news stopped Friday’s market rally dead in its tracks. US index futures are trading down 0.1%-0.2% coming off Friday’s rallies of 0.1%-0.2%. The 10-year US treasury note yield is climbing this morning and is back up close to 4.65%. European markets, which closed down on Friday are playing a big of catch-up this morning with the FTSE up 0.6% and the Dax up 0.2%.

There have been a couple of big pops in commodity trading today with Natural Gas soaring 5.3% and snapping out of a recent losing streak, while Copper is up 1.0%. US Crude Oil and Gold are steady so far today with gains of 0.1%.

Being a partial holiday, it’s a quiet day for business news, but the next three days could more than make up for it. Tomorrow brings US Consumer Prices, followed by US Retail Sales and Producer Prices on Wednesday. Earnings season for US retailers kicks off tomorrow with results from Home Depot, followed by Target on Wednesday and Walmart on Thursday.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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