Weekly Open - 19/05/2025 - Blow off top in full swing? Or will Moody's US credit rating downgrade have something to say?

A perfect V shaped recovery. Greed index is growing stronger. Economic challenges? What economic challenges? Moody's downgrades the USA credit rating from stable to negative!

Welcome to the Weekly Open. As usual, my apologies if any data and/or information has changed as a result of Asian/early European trading.

NB - I am using a new chart deck for this week. All feedback is welcomed!

It has/had been a case of a perfect V shaped recovery for all of the major indexes. So much so that the greed indicator is becoming incredibly strong again! This was all before the major news after the close on Friday that Moody’s had lowered the USA credit rating from stable to negative.

This brings Moody’s in line with other main agencies and also ‘doubt's’ the United States' ability to repay its debts. Hence the drop from the highest level (AAA) down one level to AA1.

This unsurprisingly could have a massive impact on the markets this coming week! Monday will certainly be interesting!

According to Polymarket, there is currently a 4% chance of the US defaulting on its debt in 2025. Personally, I don’t think that this will happen as it would go down as political suicide, something that Trump and team are very unlikely to be seeking. You can follow that market here.

The market basically works on sentiment and consumer confidence. If confidence is rocked as a result of this downgrade then watch out for more potential high volatility this week.

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Summary of the major indices last week

DOW JONES = UP 1,405.36 points (3.41%)

NASDAQ = UP 1,366.48 points (6.81%)

S & P 500 = UP 298.47 points (5.27%)

FTSE 100 = UP 155.7 points (1.82%)

DAX = UP 268.11 points (1.14%)

NIKKEI = UP 482 points (1.29%)

HANG SENG = UP 477.31 points (2.09%)

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DOW JONES

NASDAQ

S & P 500

NIKKEI (Japan)

HANG SENG (Hong Kong)

DAX (Germany)

FTSE 100

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Podcast + Posts

Posts this coming week will include a deep dive into Thorium and also a Layman’s look at Basel III regulations.

Podcasts are scheduled with

E.M. Burlingame

of

E.M.’s Newsletter

and also

Robert Bryce

.

ALL podcasts are released to PAID SUBSCRIBERS first. To gain early access to all podcasts before the general public (and other benefits too) then please consider becoming a paid subscriber by using the button below.

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Moving on and let’s have a look at Treasury Yields, DXY, VIX, HYG and 1 major caveat for the week ahead!