Fitch Ratings kept its pristine AAA rating on the U.S. on Monday, but the credit-ratings company downgraded its outlook to “negative” in the wake of the Supercommittee’s failure to find $1.2 trillion in spending cuts.
The development, which had been hinted at last week, could have been worse for the U.S. as McGraw-Hill and Standard & Poor’s slashed its credit rating for the first time ever in August.
However, the negative outlook indicates a “slightly greater” than 50% chance that Fitch downgrades the U.S. over the next two years.
“Failure to reach agreement in 2013 on a credible deficit reduction plan and a worsening of the economic and fiscal outlook would likely result in a downgrade of the U.S. sovereign rating,” David Riley, a managing director at Fitch, said in the report as quoted by foxbusiness.com
Fitch warned that its revised fiscal projections call for federal debt held by the public to exceed 90% of gross domestic product and debt interest payments making up more than 20% of total tax revenues by the end of the decade.
The Dow Jones Industrial Average soared 291 points, or 2.6%, to 11,523, the S&P 500 jumped 33.9 points, or 2.9%, to 1,193 and the Nasdaq Composite rallied 85.8 points, or 3.5%, to 2,527.
After falling close to 1000 points, or 8%, over the past two weeks, the blue chips have rallied on the day. The Nasdaq had an even better performance, its best on a percentage basis since August. How about Indonesia stock market today? Here are stock recommendations as provided by Bisnis Indonesia today:
Jakarta Composite Index (JCI) is estimated to move within the range of 3,580-3,679. From the indicator movement, the index is in oversold area and stochastic indicator as well. RSI moves to downtrend and enters oversold area.
Minna Padi Investama:
The index today may rise within the range of 3,623-3,718. Several stocks to watch: KLBF, BBCA, and BMRI.
The index today technically tends to be mixed within the range of 3,610-3,680. The meeting of finance ministers in Euro Zone is expected to complete the policy of European Stability Fund. Several stocks to watch: BBNI, MAPI, SMCB, and CMNP.
Disclosure: No position at the stock mentioned above.