Fitch US downgrade unsettles equity markets but trend remains up

Markets went a little risk-off last week after one of the big three credit ratings agencies, Fitch, downgraded their US credit rating from from AAA to AA+. Included in the reasons for this was “the repeated debt-limit political standoffs and last-minute resolutions” which had “eroded market confidence”. Equities sold-off sharply after the announcement but all major US stock indices remain well above their much-watched 200 day moving averages. US government Bonds also sold-off on the news and longer-term Treasury yields rallied to their highest levels since November.

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