AAP Podcast #47: The Fitch Downgrade, Key Levels for the S&P 500, Earnings Season and Labor Gains

On this week’s AAP Podcast, Chris Versace is joined by AAP team member Bob Lang and the two tackle the Fitch downgrade this week for the US’s credit rating that roiled stocks just as we enter a seasonally weak time for the market. Bob puts some context around Fitch’s downgrade comparing it to the last rating downgrade in 2011. With the S&P 500 breaking its 20-day moving average, the next level of support to watch is the 50-day moving average, which comes in near 4,350 for the S&P 500. Bob also tells listeners to watch for the market becoming oversold, something that has him watching the market oscillators.

The conversation between the two then pivots to the June quarter earnings season, which so far has gone pretty well. However, as yet we haven’t seen any material upward revisions for S&P 500 EPS in the back half of 2023 or 2024. Chris shares why he thinks this is important to gauge how much steam is left in the market, and by the end of this week, ~80% of the S&P 500 basket will have reported. Chris and Bob round out the conversation by discussing the recent rise in the 10-year Treasury yield back above 4%, and if that turns out to be a sustained move how it could be a headwind for stocks.  The end discussing the Teamsters-UPS (UPS) contract and what it could mean for Ford (F), General Motors (GM), and Stellantis (STLA) just as the UAW shares it is looking for double-digit pay rises and defined-benefit pensions for all workers.