S&P 500 drops 0.42% on U.S. Bank downgrades and Chinese 'deflation'. Remains overbought at 4480.

(Chart 1)

Fitch cutting the rating on U.S. debt, Moody's have warned that major mortgage lenders in the U.S. will also have a credit downgrade.  Which shows overall, that money market rates are far too low.  There is a still too much liquidity in the system, as a spill over from the Trillion $ plus COVID stimulus and ultra low rates of 2020.    The other more alarming issue is China entering into deflation, which would be a billion Chinese beginning to horde and save money.  The whole world will feel the effects of Chinese businesses slashing its internal prices.

Bemusing, is some Fed officials offering that they will cut rates in 2024.  Not with oil trading above $82, unless President Biden releases millions of barrels from the Strategic Petroleum Reserve, which are relatively depleted.  This is very much revealing a stagflation scenario for Western economies.

Chart 1  shows the S&P 500 futures falling 0.42%, which, considering the issue with China and sticky inflation in the U.S., is the 'human' programmed AI or HFTs being overly optimistic.  Will the Fed shore up the stock market once again?

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Resistance at 4600

Support/s at:

4485 

4283

Slightly bid at 4520

The S&P remains overbought.  

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