Thank you for joining me. When European markets open, they are anticipated to experience a decline due to the recent downgrade of the US’s top-level credit score by ratings agency Fitch. US Treasury Secretary Janet Yellen criticized this decision, regarding it as arbitrary and based on outdated data. This downgrade comes in the aftermath of a contentious standoff between the White House and Congress over the US debt ceiling, during which the country was perilously close to defaulting on its debts.
5 things to start your day
1) BP Boss Stresses Investment in Both Fossil Fuels and Renewable Power | Bernard Looney affirms the need for investment in green energy and fossil fuels
2) United States’ Credit Rating Downgraded Following Debt Ceiling Stand-Off | The world’s largest economy undergoes a downgrade in its triple A credit rating
3) Saudi Arabia’s Borrowing Costs Reach Record High | Rapid interest rate increases in the US put extravagant projects, including the “mirror city,” at risk
4) UK Manufacturing Sector Faces Industrial Recession as Interest Rates Rise | Higher borrowing costs are plunging the manufacturing industry into a downturn
5) BMW Warns of Increased Costs in Electric Vehicle Production | Rising inflation and supply chain expenses expected to impact the carmaker’s finances
What happened overnight
Asian stock markets experienced declines as the Fitch Ratings downgrade of the US sovereign rating dampened risk sentiment despite additional support measures from China. Hong Kong and Chinese equities extended their losses, while Japanese stocks were negatively affected by a stronger yen, reducing the prospects for corporate profit.
Wall Street’s recent rally came to a halt as stocks closed mainly lower. Traders analyzed a mixed collection of corporate earnings and economic figures on Tuesday. The S&P 500 ended the day at 4,576.73, down 0.3%, stepping back from its 16-month high. The Nasdaq Composite fell 0.4% to 14,283.91, while the Dow Jones Industrial Average saw a slight increase of 0.2% at 35,630.68.
In the bond market, the 10-year Treasury yield rose to 4.03% from Monday’s closing rate of 3.97%.
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