John ATHRZ: Moody's Reduction America's Classification affects the market moral

Moody’s reduced the classification of the sovereign debt of the United States of the United States from the “AAA” degree, and was the latest agency for this step. Thus, the decrease in the classification of the Treasury effects is complete below the risk -free degree. The question is whether this change is really important and that it affects investors significantly, and should we pay attention to this development or not? Traditionally, credit rating agencies have a large power of potential lenders, while many investors face legal limits that limit the kind of investments they can enter. Obtaining an investment classification or its loss can be of utmost importance to any country trying to sell its debt. But for the United States, it’s not clear that Moody’s has a big impact. The agency issued an opinion on the basis of general information that many previously analyzed. Previous deception of rating agencies before the financial crisis and credit rating agencies previously deceived by investment bankers before the global financial crisis and obtained an investment classification of loans that were not considered, so it is not infallible. The ‘Standard & Poor’s’ and ‘Fitch’, the two main agencies, reduced the United States classification of ‘AAA’ for a long time, and ‘Standard & Poor’s’ took this step in 2011. (Bannockburn Global Forex) he saw that a late step to compensate for delay and did not have a real consequences for the merits of the United States “and that his view is probably correct. However, it is worth reading the text of the ‘Moody’s’ statement. The decision itself is not of great importance, but the facts examined are very important. Credit rating agencies may be just a mirror that reflects the prevailing market opinions, but their judgments are a clear indication of the current morale. The reduction of the credit rating is due to the accumulation of the budget deficit in the United States and the increasing possibility of increasing the release of debt instruments in the future, which is well known. The White House replied: To accuse the political prejudice, but Moody’s gives the United States a stable future prospects, based on certain assumptions believed to be intuitive, but it has become necessary to mention it these days. The first reaction of the White House was to accuse the agency of political prejudice, and this accusation looked somewhat illogical. But it is very likely that ‘Moody’s’ believed that it was his duty, at a time when the congress was on his way to a deeper budget deficit and that the Trump administration opposes institutional arrangements, to remind them that the United States must meet its rules if it wants to continue to raise capital. It is also important to take note of the possibility of unexpected things. Standard & Poor’s reduced the US credit rating in August 2011, to the difficult and complicated negotiations that occurred in the summer between politicians on the budget, which was a decisive turning point at the time, but the influence of the move was not negative or disastrous as many expected. This is what happened for ten years with the return of the Treasury effects and the appreciation of the Federal Reserve in New York for the difference in the term -the additional returns that investors demanded in exchange for the risk of lending for long periods -before and after reduction: Treasury bonds remained safe in 2011, but investors did the treasury. Foreign investors are pushing heavily. With the increasing clarity that inflation will not return, and the steadfast demand for bonds, low returns supported stocks, which were cheap compared to bonds. But the situation this time is completely different. Using the classic rule that compares the revenue in the profit (which is the reverse price with the profits) with the return of treasury effects for ten years, the returns of the shares are now less than the mortgage returns for the first time in nearly 25 years. The yields of the mortgage are also much higher than in 2011: Corona was another turning point. As the returns reached their lowest levels amid sharp financial facilitation in 2020, the performance of the shares separated from the performance of the bonds. During the previous two decades, the performance of shares and bonds was compatible with each other. In recent years, the S&B 500 has increased despite high -mortgage returns. Can the situation persist? At some point, high returns for bonds reduce corporate profits due to heavy interest costs, and also provide an attractive option for investors compared to stocks. In 2011, the “S&B” reduced the US credit rating, contributing to targeting the markets to understand that inflation is under control (as was the case to the pandemic of Koruna), increasing investor confidence in equities and bonds. But this time, with the increasing fragility of the markets, the recent “Moody’s” decision can be established in the opinions of investors and the general economic mood. Guidelines help make a decision or understand a position that led to the worldwide trade tensions of the first quarter, full of major risks for managers. The interest of the Wall Street analysts was not limited to disappointing results, but also included exact signals that could worsen and get worse in the case of an economic decline. As it usually happens, most businesses have surpassed the expectations they set for themselves. Among more than 90% of the S&P 500 index, which announced its profits, 78% exceeded the estimates of the share of the profits, which according to Factset is a higher average of the average, according to factset. But that wasn’t really important, especially as questions continue on the impact of consumers or companies that buy early products before applying customs tariffs to improve the issued numbers. Savita Sipranian of Bank of America adds that the companies themselves are concerned about their inability to distinguish between recovery trends with the purchase of large amounts of stock. In an unstable environment, reactions to the results that are more than less than expectations are exaggerated. John Potters from “Fact Cit” indicates that companies that have announced sudden positive profits have seen an average price rise by 1.9% within two days and two days after announcing the operating results. This is higher than the average price increase in five years, which is 1%. But strong future expectations, especially a quarter annually, had a greater positive impact on the share price. This graph is compiled by Sipramian: Customs Duties “Bloomberg” analysis of the texts of the conferences that companies with investors and financial analysts hold to discuss their financial results show a major increase in signals to customs duties. David Costin of the Goldman Sachs Bank estimates that 89% of the S&P 500 Customs have mentioned, a number that exceeds the businesses that referred to artificial intelligence, which has dominated the calls since the beginning of last year. The behavior of consumers or their influence was also decisive in analyzing the financial results and future expectations of companies. Marta Norton of Empower believes that it is reassuring that the mysterious economic view did not negatively affect the performance of profits, which was good enough to maintain the momentum of the market. But she adds: “With all this economic data you cannot predict the future because it does not reflect the environment we are going to.” Companies will face major challenges associated with maintaining their profit margin. I don’t think there is 100% full ability to pass these costs, so there can be a decline in profits in the short term. I don’t know how much this effect is. But we know the affected sectors, such as industries, materials, luxury consumer goods, basic commodities and technology, which are expected to be exposed to cost pressure due to customs duties. This graph, compiled by Benke Chada of the Deutsche Bank Bank, highlights the performance of corporate profits in the United States compared to other regions- as excellence in profitability was the basis for the excellence of the US economy over the past decade. So far, the United States has maintained its stability, but future performance depends on how companies have to do with customs duties: Artificial intelligence, even before anxiety of customs duties, is expected to pay the evaluation It is very high for large investors in companies to diversify their United States investments. This process has accelerated with the appearance of the Chinese company “DeepSeek” that arises in the field of major linguistic models in January, proving that artificial intelligence models do not necessarily require large capital investments. However, companies have not reduced their capital expenditure on artificial intelligence. Supramian added that the scope of companies in the long expensive profits of artificial intelligence can achieve, especially as companies usually achieve less performance in reinvestment courses. From our point of view, capitalist expenses on artificial intelligence are a greater motivation for the market than only achieving profits from individual artificial intelligence applications. The semiconductors are the most important beneficiary, but the increase in energy consumption due to artificial intelligence and the construction of data centers will also lead to an increase in demand for electricity, construction, facilities and basic commodities, which will in the end create more jobs. At the same time, Costin explains that artificial intelligence is at least not a change in the rules of the game. Since none of the groups of companies that are supposed to benefit more since the beginning of the year more than artificial intelligence may be better than the average stock performance. The stock basket of the “Goldman” bank, which reaches revenue through artificial intelligence technologies, achieved a stable performance compared to the ‘S&B’ balance, while the basket of the artificial infrastructure of artificial intelligence in the second phase was a decrease by two degrees Celsius compared to the same index. The shares that are expected to achieve long -term production profits, thanks to artificial intelligence, which falls with three percentage points behind the market: Is it time to pay attention to shares of small market value? Adrian Hilver of the Westwood Group believes that small businesses will benefit from technology adoption and innovation to maintain their profit margins. Small market value businesses were not quite bad in terms of basic performance; Indeed, the major market value businesses have resulted in the performance of the rest of the businesses, according to Koy Ngwin of the company “Research Affilles”. The US withdrawal of globalization policies is changing the environment for global platform companies, creating an opportunity for small businesses to take advantage of new conditions and market growth. Our position is not necessarily that small market value businesses will somehow be better than these large businesses. This will be a very radical shift. Our position is that the global economic system changes, in a way that will make things a little more difficult for global platform companies. At the same time, small stocks are considered a low price. Since corporate profit margins are under pressure due to customs duties, proposed tax cuts can provide a temporary rest period. Ngawin is still careful and j not to an optimistic position. With the debt ratio reaching the gross domestic product in the United States, he believes that traditional stimulation will be less effective than before. In addition, the credit rating of the “Moody” increases the problems of the economic situation rather than improving it.