In the last week, ratings agency Fitch reversed the bullish stock momentum. It downgraded U.S. debt, citing politics, fiscal spending, and the debt ceiling limits. Last Friday, selling accelerated just before the market closed. Is this a blip on the market’s way up or a trend downward?
Apple (AAPL) barely held onto its $3 trillion market capitalization at $3.006T. The stock lost 4.8% after the company posted weaker hardware sales, offset by services.
In the U.S., the BLS posted nonfarm payrolls of 187,000 jobs added. Markets expected 200,000. Wages are still elevated, supporting the Fed’s future decision to raise rates again. Higher rates that do not rise further are the best-case scenario for long-term investors.
Speculators willing to bet that the 2023 rally will continue may buy the S&P 500 ETF. However, expect some firms to trade higher while others slump. Amazon (AMZN) posted strong AWS revenue trends. Its operating efficiency in retail is improving results.
Microsoft (MSFT) is trending lower because its 33.8x price-to-earnings ratio already accounts for its growth ahead. In addition, when Fortinet (FTNT), a cybersecurity firm, cut its guidance, the 25% drop is a warning for tech investors.
Customer spending on tech solutions is not immune to an economic slowdown.
