In a note, Moody’s Investors Service has issued a warning that a government shutdown in the United States would have a “credit negative” impact on the country. The note highlights how the polarization in American politics limits fiscal policymaking, especially during a time of declining fiscal strength. As of now, Moody’s maintains an AAA stable rating on the U.S. government, but Fitch downgraded the U.S. to AA+ from AAA in August. Federal spending laws are set to expire on September 30, adding to concerns about a potential government shutdown.
Amazon has announced that it plans to invest up to $4 billion in AI startup Anthropic and acquire a minority ownership stake in the company. This move aims to capitalize on the growing demand for generative AI. Anthropic has chosen Amazon Web Services as its primary cloud provider and will offer unique features for model customization and fine-tuning to AWS customers. Following this announcement, Amazon shares saw a 1.2% increase on Monday morning.
Chicago Fed President Austan Goolsbee has stated that the Federal Reserve is nearing the point where it can maintain stable interest rates, albeit at a higher level than what the market is accustomed to. Goolsbee explained in a CNBC interview that the focus will soon shift from how high interest rates will go to how long they will be held steady. The Fed’s projections indicate a longer timeline for rate increases than what market expectations initially suggested. Consequently, market pricing has adjusted, aligning with the Fed’s projections of two quarter-point rate cuts in 2024, according to CME Group tracking.
Chevron’s CEO, Mike Wirth, expressed the possibility of oil reaching $100 per barrel in the U.S. and even higher in other countries. Wirth attributed this potential to a strong global economy, production cutbacks in certain OPEC countries, and tightening market conditions. The recent relaxation of fuel bans by Russia further contributed to a gain in oil prices. As a result, the energy sector, led by Chevron, experienced a 1.3% increase in early afternoon trading. Chevron’s stock also rose by 1.3%, with a year-to-date increase of over 7%.