The United States may face renewed market turbulence this week after Moody’s Investors Service stripped the country of its last triple-A credit rating, citing an unsustainable fiscal trajectory and lack of political consensus to address mounting debt.

The downgrade, announced on Friday, marks the final blow from the big three ratings agencies — following earlier cuts by S&P in 2011 and Fitch in 2023 — and comes amid growing alarm over the $36 trillion national debt and persistent budget deficits.

Moody’s lowered the rating by one notch to AA1 and issued a stark warning about long-term fiscal deterioration.

Concerns mount over deficits and political gridlock

In its statement, Moody’s highlighted the lack of credible measures by successive US administrations and Congress to rein in soaring deficits.

“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs. We do not believe that material multiyear reductions in mandatory spending and deficits will result from current fiscal proposals under consideration,” Moody’s said.

“We expect larger deficits as entitlement spending rises while government revenue remains broadly flat,” the agency said.

“Persistent, large fiscal deficits will drive the government’s debt and interest burden higher.”

The downgrade arrives at a politically fraught moment.

Former President Donald Trump’s latest tax proposal — dubbed “one big, beautiful bill” — was blocked by rightwing lawmakers last week, but still looms as a potential fiscal flashpoint.

Economists warn that making Trump’s previous tax cuts permanent would add trillions to the deficit over time.

Treasury Secretary Scott Bessent downplayed the downgrade during an interview on NBC’s Meet the Press, calling Moody’s a “lagging indicator.”

Still, the shift has sharpened focus on the fragile balance between economic growth, fiscal credibility, and political partisanship.

Will markets head lower on Monday?

While previous downgrades triggered sharp sell-offs in global markets — notably in 2011 when the S&P 500 plunged over 6% after the S&P downgrade — early signs suggest that the immediate market reaction to Moody’s decision may be less dramatic.

US stock futures indicated that markets would decline about 1% when they begin trading in the United States on Monday morning.

Nasdaq futures fell 0.38% and gold ticked higher by 0.27% in weekend trading, according to IG analyst Tony Sycamore.

In Asia, South Korea’s Kospi and Taiwan’s Taiex each fell more than 1% on Monday, while Tokyo and Hong Kong markets declined around 0.5%.

The US dollar weakened further against the euro and yen, while treasury yields climbed, with the 10-year bond rising to 4.51% in early Asian trading, up from 4.44% on Friday.

Some investors anticipate further upward pressure on yields as the downgrade prompts buyers to demand higher compensation for perceived risk.

“There may be more selling pressures,” said Tracy Chen of Brandywine Global.

“The downgrade may indicate that investors will demand higher yields on treasuries.”

Still, others believe regulatory rules and central bank operations will limit the fallout.

Toby Nangle, former global head of asset allocation at Columbia Threadneedle, noted that AA1-rated assets are treated similarly to triple-A ones for capital adequacy purposes.

“From a mechanical perspective, the downgrade almost certainly doesn’t matter,” he wrote in the Financial Times.

Debate over credibility and consequences intensifies

The downgrade has also reignited partisan tensions.

White House communications director Steven Cheung criticised Moody’s, alleging that economist Mark Zandi — often quoted in press coverage — had political motives.

“He’s been a Never Trumper since 2016,” Cheung claimed.

However, Zandi is affiliated with Moody’s Analytics, a separate entity from the credit ratings division.

In the broader financial world, some remain skeptical that the downgrade changes the fundamental status of US debt.

“Let’s get real,” said Stephen Innes of SPI Asset Management.

“If there’s one asset on this planet with the least chance of default, it’s a US Treasury bond.”

Innes and others note that the United States issues debt in a currency it controls and continues to enjoy the privilege of printing the world’s primary reserve currency.

“It’s not moral hazard — it’s just an operational fact,” he added.

Outlook uncertain amid fiscal strain and political inertia

The implications of the downgrade may extend beyond Washington.

Analysts warn that the spotlight may soon turn to other heavily indebted nations such as Japan, where debt-to-GDP ratios are among the highest in the world.

The move could force global investors to reassess sovereign risk more broadly, especially in an environment of high global interest rates.

With presidential elections on the horizon and lawmakers locked in budgetary standoffs, the downgrade may further constrain Washington’s room for maneuver.

Investors and analysts will watch closely in the coming days for signs of deeper financial stress — or whether, as some expect, markets will simply absorb the blow and move on.

Regardless of the near-term impact, Moody’s move underscores the long-term risks posed by political stalemate and rising debt — risks that markets may increasingly be forced to reckon with.

The post Moody’s downgrades US credit rating: what to expect of markets on Monday? appeared first on Invezz

XPeng stock price has stagnated in the past few weeks, but this could change when the Tesla and Nio rival publishes its financial results for the first quarter. XPEV was trading at $20.67,  down by 23% from its highest point this year, and 28% above its lowest level this year. This article explores what to expect this week.

XPeng’s growth is continuing

XPeng is a top electric vehicle company that manufactures a few brands like G3, G6, G7, G9, P5, and P7. It makes sedans, crossovers, and sports utility vehicles that have become highly popular in China. It is also working on its electric flying cars that will come out next year.

XPeng’s business has done well in the past few years as deliveries continued rising even as competition with companies like Nio, Tesla, and BYD continued. 

The most recent numbers showed that it delivered 35,045 vehicles in April, a 273% annual increase. It has delivered 30,000 vehicles a month in the last six months, and the management expects its growth to accelerate. 

Most of this growth is coming from its Mona M03 vehicle, which achieved its 100,000th production rate and P7+, which got to its 50,000 milestone. XPeng has already delivered 129,053 vehicles this year, a 313% annual increase.

Delivering such numbers is an important milestone for the company considering that the EV business is getting highly competitive and saturated. It is estimated that there are over 40 EV companies in the country.

BYD maintains a leading market share, with other brands like Tesla, Nio, Li Auto, Zeekr, and Geely, among others. Most notably, its deliveries are coming as Tesla sales continue falling. Its first-quarter deliveries dropped to 336,680, down from 386,810 in the same period last year. 

Read more: Here’s why the XPeng stock price may surge 140% in 2025

XPEV earnings ahead

The next important catalyst for the XPEV stock price will be its earnings, which are expected to be strong. Yahoo Finance data shows that the company’s revenue will come in at CNY 15.68 billion, a 139% annual increase. 

Analysts also expect the annual revenue to come in at CNY 80.79 billion, a 97% annual increase. The earnings per share is expected to be a loss of 1.51 CNY, an increase from 1.49. 

XPeng’s losses have been a major challenge as its development costs have jumped over the years. It has also spent millions of dollars in share-based compensation. 

Nonetheless, the management expects to continue narrowing its losses as its business matures. Its annual EPS for the year will be 2.82 CNY, down from 5.87 CNY, a big improvement. It also expects to become profitable next year when it will make 1.76 CNY in earnings per share.

Analysts are upbeat about the XPeng stock price, with the average estimate being $25, up from the current $20.6. 

XPeng stock price analysis

The daily chart shows that the XPEV share price peaked at $27.15 earlier this year, and then dropped to $20.6 today. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA).

The risk, however, is that the XPeng stock price has formed a bearish pennant chart pattern, a popular bearish sign. This pattern is made up of a vertical line and a symmetrical triangle pattern. 

Therefore, anything may happen this week. The bearish pennant points to more downside, potentially to the 100-day EMA at $18.25. The alternative is where the XPeng stock price bounces back after earnings and retests the year-to-date high of $27, up by 31% above the current level.

The post XPeng stock price analysis: Is this Nio rival a buy ahead of earnings? appeared first on Invezz

European stock markets commenced the trading week on a cautious footing Monday, with most major indices opening lower as investors turned their attention to a series of significant geopolitical events unfolding across the region.

Amidst this broader market sentiment, a major corporate development saw Dutch tech investor Prosus formally launch its multi-billion euro cash offer for food delivery giant Just Eat Takeaway.com.

The opening bell ushered in a period of negative sentiment across European bourses.

The pan-European Stoxx 600 index was down 0.4% shortly after trading began, reflecting a broad-based retreat.

Losses were evident across most sectors and all major national indices.

The UK’s FTSE 100 and France’s CAC 40 both shed 0.5%, while Germany’s DAX traded 0.2% lower, underscoring the cautious mood prevailing among investors.

Prosus moves forward with Just Eat takeaway acquisition

In a significant M&A development, Dutch technology investor Prosus officially launched its cash offer to acquire Just Eat Takeaway.com on Monday.

Prosus reiterated its offer price of 20.30 euros ($22.8) per share, a figure that values the delivery behemoth at approximately 4.1 billion euros (around $4.6 billion at current exchange rates).

This offer represents a substantial premium of 63% to Just Eat Takeaway’s closing price on February 21, when the deal was initially announced.

The offer period for this major acquisition is set to begin on Tuesday, with expectations that the transaction will be completed by the end of 2025.

Underscoring the strategic rationale behind the bid, Prosus CEO Fabricio Bloisi stated on Monday, “Europe is at a pivotal moment to create a new generation of AI-powered tech champions, and this transaction is a unique opportunity to lead that transformation.”

Endorsing the proposed takeover, Jitse Groen, CEO and founder of Just Eat Takeaway.com, issued a statement alongside the offer launch.

He confirmed that the company is “recommending that shareholders tender their shares and vote in favor of the takeover at its Extraordinary General Meeting in July.”

Geopolitics in focus

Beyond corporate news, European market participants on Monday are keenly focused on several pivotal geopolitical events that could significantly impact the region.

Firstly, a much-anticipated UK-EU summit is taking place in London.

It is widely expected that British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen will announce a new defense and security pact.

Additionally, further agreements are anticipated concerning the reduction of bureaucratic red tape, youth mobility programs, and the easing of trade restrictions.

This summit comes amidst ongoing debate, with some critics suggesting that the British government’s approach risks reversing elements of Brexit.

Later in the day, attention will shift to a high-stakes call between US President Donald Trump and Russia’s President Vladimir Putin.

This direct communication follows the decision by both leaders to skip peace talks that were scheduled to be held in Turkey last week.

The failure to achieve a ceasefire in the ongoing conflict has seen both Russia and Ukraine blaming each other for the impasse.

The outcomes of these diplomatic engagements are being closely watched for their potential to influence market stability and international relations.

The post Europe markets open: Stoxx 600 down 0.4% on geopolitics; Prosus launches Just Eat takeover appeared first on Invezz

The Schwab US Dividend Equity ETF (SCHD) stock price has rebounded in the past few weeks, rising by 11.5% from its lowest point this year. SCHD has jumped to a high of $26.60, its highest point since April 3. This article explores the top catalysts for the blue-chip dividend ETF.

Top SCHD ETF earnings

The first important catalyst for the SCHD ETF will be earnings by some of its top constituent companies. Historically, these earnings have impacted its performance, especially if they are big companies.

The first one will be Home Depot, the fifth-biggest company in the fund with a $2.8 billion stock. Home Depot’s earnings are expected to show that its revenue rose by 7.78% in the last quarter to $39.25 billion.

Target, one of the top American retailers, will also publish its financial results this week. These numbers are expected to reveal that its earnings per share dropped from $2.03 last year to $1.69 in the last quarter. The revenue figure is expected to drop by 0.49% to $24.5 billion.

Target has been struggling in the past few years and has continued to underperform companies like Walmart and Costco. It has been hurt by its DEI policies, slow rollout of its e-commerce business, and its groceries approach. All these factors explain why the Target stock price has dropped by over 43% from its highest point last year.

The other SCHD company to watch will be Buckle, which will release its earnings on Friday this week.

The recent earnings season has been strong, with a report by FactSet showing that the blended earnings growth of companies in the S&P 500 Index coming in at 13.6%, the second quarter of double-digit growth. 

However, these earnings have been viewed as being transitory because they did not include tariffs that Trump announced last month. 

Moody’s credit rating downgrade

The other key catalyst for the SCHD ETF will be the decision by Moody’s to downgrade the US credit rating. The company moved the rating from AAA to AA1 a year after it changed its outlook to negative.

This credit rating downgrade came as Washington politicians deliberated on Donald Trump’s spending package that will increase the deficit by over $4 trillion in the next decade.

The credit rate downgrade is always a big deal, which explains why American stock futures are falling. Those tied to the Dow Jones dropped by 400 points, while the Nasdaq 100 and S&P 500 ones fell by 70 and 308, respectively. 

On the positive side, Moody’s did not tell the market anything new. Most analysts already know that the situation is not all good as the public debt has jumped to over $36.8 trillion. Also, the stock market has already done well since it was downgraded by S&P 500 in 2011 and by Fitch in 2022.

Read more: Moody’s stock price is rising, but chart points to a pullback

SCHD ETF stock price analysis

SCHD ETF stock chart by TradingView

The daily chart shows that the SCHD ETF share price has rebounded in the past few weeks, moving from a low of $23.8 in April to $26.63 today. It has jumped above the 50-day and 25-day Exponential Moving Averages (EMA).

The stock has also retested the important resistance point at $26.63, the lowest swing in December last year. Also, the Relative Strength Index (RSI) and the MACD indicators have continued rising. 

Therefore, the most likely scenario is where the SCHD stock experiences some volatility as the market reflects on the credit rating downgrade. It will then resume the uptrend as bulls attempt to hit the year-to-date high of $28.56.

The post SCHD ETF analysis: 2 catalysts to move the dividend fund this week appeared first on Invezz

CoreWeave stock price has surged to a record high as investors cheer the recent earnings and its continued growth. It jumped to a high of $83.97 on Friday, up by 150% from its lowest level this year. This surge brought its market cap to over $38 billion, making it one of the top players in the AI industry. 

Why CoreWeave stock price is soaring

CorweWeave is one of the companies that have come up during the ongoing artificial intelligence wave.

It is an infrastructure company that owns large data centers in the United States and Europe and is expanding in other places. 

The company mainly focuses on NVIDIA GPUs and AMD’s CPUs, which it offers to companies building AI products. 

For example, instead of buying NVIDIA’s HGX H200 GPU that costs for over $150,000, one can pay $50 an hour to use it. 

CoreWeave’s business is also used by some of the biggest companies in the tech industry like Microsoft, OpenAI, Meta Platforms, and IBM. Microsoft accounts for about 62% of its revenue. 

The most recent financial results showed that CoreWeave’s business continued growing, a sign that the AI growth is continuing. Its revenue jumped by 420% to $981 million in the first quarter. 

Most importantly, the company reported a backlog of over $25.9 billion during the quarter as it expanded its relationship with firms like IBM and OpenAI. 

The company also showed improved profitability metrics. The adjusted operating income jumped to $163 million, up by 17% from the same quarter last year. This happened as the adjusted operating margin rose to 17%. Its adjusted EBITDA jumped to $606 million during the quarter. 

CRWV issued a strong guidance

CoreWeave’s guidance showed that its business will continue growing. The management expects the data to show that its revenue will come in at between $1.06 billion and $1.1 billion in Q2, much higher than the $395 million it made in the same period last year.

Chances are that the company’s revenue will be much higher than its guidance, since similar companies are often highly conservative. 

CoreWeave’s adjusted operating income is expected to be between $140 million and $170 million, while its capital expenditure will be between $3 billion and $3.5 billion. 

The annual revenue will be between $4.9 billion and $5.1 billion, while its capital expenditure will be between $20 billion and $23 billion. These are all strong numbers for a company that was started in 2017. 

Analysts are largely bullish on the CoreWeave stock price, with the average estimate by analyst being $80.30, up from the current $65.

CoreWeave faces numerous risks ahead. The first one is its growing capital expenditure, which is being funded by debt. This capex and the accompanying cash burn will likely continue growing as it increases its data centers. 

Further, the company will need to continually buying more new GPUs and CPUs as companies like NVIDIA and AMD launch them. 

CoreWeave stock price analysis

The two-hour chart shows that the CoreWeave share price has been in a strong bullish uptrend in the past few days. It recently moved above the key resistance point at $64.65, its highest swing since April 2. 

CoreWeave stock price has remained above the 50-period moving average. Therefore, the most likely scenario is where the stock retreats to $64.65 in the coming days, and then it resumes the uptrend. In the long term, the stock will likely continue rising and possibly hit the resistance point at $100.

The post CoreWeave stock price analysis: is it the next multibagger company? appeared first on Invezz