Moody's is the last of the three Institutions to downgrade the U.S. investment rating!
Institutions have missed out on this round of retail investors' overbought rebound.The previous article mentioned that the recent rebound's Block Buy has all been from retail investors! Institutions have instead been unloading their positions, and the current level is already close to the end of the rebound.
Therefore, Institutions continuously release Bearish news using usual methods to create stock price declines, so that they can buy at the bottom. This round of decline may likely be lower than the previous one, as Institutions have not bought at the earlier positions and will definitely buy at lower prices.
After Fitch and Standard & Poor's downgraded the U.S. investment rating from AAA to AA+ nearly two months ago, we observed a decline. It is clear that this round is intentionally releasing significant Bearish news to suppress the retail market, as this rebound has moved from oversold to overbought, which is very irrational behavior. Note that,Buffett still Holds a massive amount of Cash.
Morgan Stanley has already released news that if there are no interest rate cuts in 2025, what will retail investors do?It is clearly a deliberately released Bearish message.We will not go into detail here about whether the Federal Reserve will cut interest rates, but it is evident that Powell is currently finding it difficult to decide whether to cut rates, as the inflation issues brought about by tariff policies may likely have a lag, similar to how Walmart needs to consume inventory before raising prices.
Therefore, it is highly probable that Powell will opt for an interest rate cut, but it requires an opportunity.We can also see that Powell has modified the conditions for interest rate cuts in the latest meeting.
It turns out that average inflation was used as an indicator, but now a way out has been provided first, allowing for the average to be disregarded...