Only one of the 3 major credit rating agencies still has the US with the highest possible rating, meaning they have a high degree of certainty to meet financial commitments and low degree of default. Narrowly averting a government shutdown over the weekend, reduced the possibility of Moody’s downgrading the US like S&P Global did in 2011 and Fitch Ratings did last month, stating “repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management”.
Economic data suggests a greater probability of a soft landing than a recession, yet this greatly depends upon several factors, such as consumer sentiment and confidence, as well as wage growth further suspending high inflation rates. Last week the Fed announced another hike is likely, which led to deflated stock outlooks and treasury yields spiked.
For the short-term, there is growing sentiment for declines for the larger capitalized companies, especially in the energy, materials, and real estate sectors. More positive outlooks are for the communication services, consumer discretionary, and utility sectors.
Continued market volatility underscores the importance of sticking to your long-term plan, despite the headlines and market noise. History has proven the markets are resilient and can recover; our current environment of pessimism will change and is a matter of when, not if. Tracking performance toward your long-term goals, not short-term performance, can make market swings easier to handle emotionally.
The foregoing content reflects the opinions of Mountain Wealth Planning and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.
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