I would like to leave that 5/16 SPX Hobson Candle (with Sun conjunct Uranus in Taurus) high and dry. This would call for a Gapper Downer below 5900 that keeps its chasm wide open. That would convince me that, after several false alarms, the trip to 6/16 and a retest or a new low has begun.
Message 34252966
By the way I have put 7/4/25 (trade date 7/3/25, close) on the H1Radar.
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This may be the pin prick to the enormous debt bubble:
The decision to lower the United States credit profile would be expected, at the margin, to lift the yield that investors demand in order to buy U.S. Treasury debt to reflect more risk, and could dampen sentiment toward owning U.S. assets, including stocks. That said, all the major credit rating agencies continue to give the United States their second-highest available rating.
The yield on the benchmark 10-year Treasury note climbed 3 basis points in after-hours trading, trading at 4.48%. The iShares 20+ Year Treasury Bond ETF — a proxy for longer term debt prices — fell about 1% in after hours trading, while the SPDR S&P 500 ETF Trust that tracks the benchmark index for U.S. stocks dropped 0.4%.
Moody’s had been a holdout in keeping U.S. sovereign debt at the highest credit rating possible, and brings the 116-year-old agency into line with its rivals. Standard & Poor’s downgraded the U.S. to AA+ from AAA in August 2011, and Fitch Ratings also cut the U.S. rating to AA+ from AAA, in August 2023.
“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s analysts said in a statement. “We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”
Massive deficitThe U.S. is running a massive budget deficit as interest costs for Treasury debt continued to rise due to a combination of higher rates and more principal debt to finance. The fiscal deficit in the year that began October 1 is already running at $1.05 trillion, 13% higher than a year ago. Revenue from tariffs helped shave some of the imbalance last month.
In its statement accompanying the downgrade, Moody’s analysts wrote that, “If the 2017 Tax Cuts and Jobs Act is extended, which is our base case, it will add around $4 trillion to the federal fiscal primary (excluding interest payments) deficit over the next decade.”
“As a result, we expect federal deficits to widen, reaching nearly 9% of GDP by 2035, up from 6.4% in 2024, driven mainly by increased interest payments on debt, rising entitlement spending and relatively low revenue generation,” Moody’s said. We anticipate that the federal debt burden will rise to about 134% of GDP by 2035, compared to 98% in 2024.
The Moody’s downgrade came as the GOP-led House Budget Committee on Friday rejected a sweeping tax cut package as part of President Donald Trump’s economic agenda, including extending tax cuts first enacted in 2017.
‘Less demand’“Treasurys are still dealing with the fundamental factor of less foreign demand for them and the growing size of the pile of debt that needs to be constantly refinanced is not going to change, but [Moody’s] is symbolic in the sense that here’s a major rating agency that’s calling out that the U.S. has strained debts and deficits,” said Peter Boockvar, chief investment officer at Bleakley Financial Group |
