End of a Busy Week, Ahead of a Long Weekend
End of a Busy Week, Ahead of a Long Weekend
Stocks dropped heavily yesterday in the United States amid pessimism that dominated financial markets, after the Federal Reserve Bank signaled the economy will fall deeper in recession this year, as unemployment is expected to rise; meanwhile the U.S. economy lacks fundamentals today ahead of a long weekend, as Americans celebrate Memorial Day next Monday.
Meanwhile investors are becoming increasingly concerned over the outlook for the U.S. credit rating, as speculations are mounting that the rating agencies will downgrade the AAA rating for the U.S. after the outlook for U.K. AAA credit rating was downgraded to negative from stable.
However, I don’t really believe that the credit rating for the U.S. will be downgraded, as that would probably mean that the whole financial system in which capitalism is based on and the perception among investors that Treasuries are backed by the full faith of the United States government, will signal that the U.S. won’t lose its AAA rating.
But the effects on the U.S. dollar were rather clear, as the dollar lost ground against major currencies, while investors headed to safety measures including gold and precious metals in general, especially since stock markets are still expected to drop further amid the ongoing uncertainty.
U.S. Stock indexes fluctuated in today’s early trading session, as the lack of fundamentals provided investors with a little room to breathe after the huge losses acquired throughout this week; however we still preserve our bearish outlook for equities over the upcoming period.
The DJIA index rose so far today by 22.86 points or 0.28% and was last traded at 8314.99, while the S&P 500 index rose 2.79 points or 0.31% and was last traded at 891.12, and finally the NASDAQ Composite index rose 4.34 points or 0.26% and was last traded at 1699.59, data as of 10:18 New York time.
The week is coming to an end, and investors will be looking for next week, as further hints will be available as to whether the U.S. economy is improving indeed or not, but for now, I would say watch out for the crisis is not over yet, and the economy is still in recession, and accordingly the outlook remains fragile…
Ecpulse
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