What happened this week

Last Tuesday, Fitch officially announced that is was downgrading the United States’ long-term foreign currency issuer default rating from ‘AAA’ to ‘AA+’. The agency cited concerns of expected fiscal deterioration, rising deficits, and tightening by the Federal Reserve. US Treasury Secretary Janet Yellen, pushed back against the downgraded saying; "I strongly disagree with Fitch Ratings’ decision," Yellen's statement said. "The change by Fitch Ratings announced today is arbitrary and based on outdated data." "Fitch’s quantitative ratings model declined markedly between 2018 and 2020 – and yet Fitch is announcing its change now, despite the progress that we see in many of the indicators that Fitch relies on for its decision," she continued. "Many of these measures, including those related to governance, have shown improvement over the course of this Administration, with the passage of bipartisan legislation to address the debt limit, invest in infrastructure, and make other investments in America’s competitiveness.”

The US housing market affordability is at a record all time low, a report released by Redfin last Friday showed that the median home mortgage payment hit $2,605 in July, up 19% from a year ago. Thirty-seven states now require at least 30% of median annual income for new home payments. Experts in the housing sector cite the problem is primarily a supply issue not a demand issue, normally when interest rates areas high as they are buyer shy away and subsequently housing prices drop to compensate for the expensive interest rates, but not in the market.

Looking ahead to this week:

Mon Aug 7th: Tyson Food reports quarterly earnings

Tues Aug 8th: Duke Energy, Rivian, Lyft and UPS 9expected good earning after teaming up with Teamsters last month in a $30 billion contract)

Wed Aug 9th:  Disney to report

Thurs Aug 10th:  The Consumer Price Index for July is expected  to show inflation moderating, with core inflation holding at 4.8%

Fri Aug 11th: The Producer Price Index is expected to rise 0.7% above the prior months 0.1%.