Fitch Ratings downgrades the U.S. from AAA to AA+ due to debt ceiling standoffs and fiscal concerns. Disagreements arise, but the downgrade reflects rising debt and governance issues. Markets react with higher bond yields, prompting a closer look at potential implications for investors.

U.S. equities started August with a down week after closing out a strong July. Rising Treasury yields and an unexpected downgrade to the U.S. government’s credit rating weighed on sentiment. The Nasdaq suffered the largest losses for the week. On the corporate earnings side, Amazon significantly beat estimates and the stock rallied more than 8% on Friday. Apple was down about 5% after a mixed report as iPhone sales disappointed. Fitch Ratings on Tuesday downgraded the credit rating of U.S. government debt from AAA, to AA+, with the ratings agency saying its decision “reflects governance and medium-term fiscal challenges.”

What a week it has been for the fixed-income market, as long-end rates surged and EM central banks initiated their easing cycle!

The US economy remains resilient despite another hike, the IMF lifts 2023 GDP forecasts and the S&P 500 earnings are predicted to accelerate in 2024. Each week, the Syz investment team takes you through the last seven days in seven charts.

Main US equities indices ended higher over a week notable for the Dow Jones Industrial Average notching its 13th consecutive daily gain on Wednesday, which marked its longest winning streak since 1987. Trading activity was relatively subdued due to the summer vacation season. It was nevertheless a busy week in terms of news flow. The Fed announced a 0.25% increase in the federal funds target rate, as expected. The tone of the Fed’s statement was received as relatively benign, however, and expectations grew that the Fed was done raising rates, at least for the year.

Central banks are diligently proceeding with their anticipated monetary policy tightening, with one exception: the Bank of Japan, which appears inclined to alter its approach to yield curve control. Despite the summer season, their commitment remains unwavering!

The VIX shows a seasonal pattern, the war continues to drive the price of wheat upwards and fund managers are now underweight commodities. Each week, the Syz investment team takes you through the last seven days in seven charts.

The Dow Jones is up 10 days in a row U.S. equity indexes advanced on hopes that the tight labor market and moderating inflation would help the economy avoid a hard landing. The Dow Jones is up 10 days in a row, which is the longest winning streak since February 2017. The Nasdaq, however, suffered a modest pullback on the week on the back of Tesla and Netflix earnings. Value stocks outperformed their growth counterparts.

This week witnessed a stable fixed income market, marked by lower rate volatility and flat performance, all leading up to a significant week ahead. The Federal Reserve, Bank of Japan, and European Central Bank are set to deliver their latest decisions on monetary policies.

US inflation might be on holiday, but the Fed is still expected to raise rates in July and the dollar's weakness continues to have an impact on the markets. Each week, the Syz investment team takes you through the last seven days in seven charts.