A Fitch Ratings executive said Thursday that the firm would likely downgrade US debt if the federal government does not get its fiscal house in order.
Speaking at the firm's global banking conference in New York, Fitch sovereign group managing director Ed Parker said "the US does not have a credible fiscal consolidation plan" and that "if we don't see one after the election, I would expect a downgrade."
Fitch rates the US at triple-A but put it on negative outlook earlier this year, and Parker's comments were a reiteration of the firm's position. Fitch has the US, UK and France on negative outlook because of high debt-to-gross-domestic-product-ratios.
Parker noted that the three countries, plus Germany, have the top credit ratings but are also the most heavily indebted nations.
"There is a limit to how high these government debt levels can go," Parker said as quoted by Foxbusiness.com.
Regarding the future of the eurozone, Parker said that in the event of a Greek exit from the eurozone, all member countries in the union would be put on negative ratings watch and placed under review. He also said that the peripheral countries of Italy, Spain, Ireland, Portugal and Cyprus, all currently on negative outlook, would be downgraded. "The big concern is potential contagion to other countries," Parker said.
Today, Jakarta Stock Exchange (JCI) may move mixed with downtrend possibility within the support and resistance level at 3,810-3,865.
Candlestick shows bearish meeting lines, signaling taking profit may occur. The support and resistance levels are within 3,875-3,900. Several stocks to monitor: INDF and UNVR.
Today, the trading may run sideways. Investors are recommended to do short term trading with buy on weakness or sell. Several stocks to watch: SMGR and INTP.
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