Fitch Ratings has downgraded the United States of America's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'AA+' from 'AAA'. The Rating Watch Negative was removed, and a Stable Outlook assigned. The Country Ceiling has been affirmed at ‚AAA‘. “Everybody who reads the newspaper knows that the United States has a very serious long-term fiscal problem.” That wasn’t a quote by some financial talking head in the aftermath of Fitch’s downgrade of America’s credit rating on Tuesday. It was a reaction by then Chairman of the Federal Reserve Ben Bernanke the last time a major rating agency took that action back in August 2011. Investors could google hundreds of such warnings over the decades and conclude that the handwringing is best ignored or even viewed as a buying opportunity. For example, a funny thing happened when Standard & Poor’s shocked the financial world 12 years ago: Stocks plunged, getting close to an official bear market, yet investors rushed to buy bonds, the very thing that had supposedly become riskier. Stocks remained unsettled for another couple of months, but an 11-year bull market marched onward. Investors are drawing false comfort from the past and from the perception that fiscal scolds have cried wolf so often. On Wednesday, U.S. stocks and bonds suffered a wave of selling after America’s credit downgrade, sending Treasury yields to the highest levels of the year and major indexes toward their worst session in months.

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The stock market in Switzerland ended trading on Wednesday with marked losses. The stock exchanges were closed on Tuesday on account of National Day. The SMI lost 0.9 per cent to 11,213 points. Among the 20 SMI stocks, there were 18 price losers and 2 price gainers. 22.45 (previously: 18.07) million shares were traded. Technology stocks trended weakly on the heels of their US counterparts. Logitech lost 2.4 per cent and AMS-Osram even more than 9 per cent. The recent disappointing Chinese economic data weighed on luxury goods stocks Richemont (-3.6%) and Swatch (-2.9%). Contrary to what participants had hoped, Beijing has not yet adopted any drastic measures to support the economy. Givaudan gave up 2 per cent. Offsetting the trading performance were the three heavyweights, which outperformed the benchmark. While Roche and Novartis only recorded slight losses, Nestle even went up by 0.4 per cent.

European stocks tumbled on Wednesday in reaction to Fitch's downgrade of the U.S. government's credit rating. The Stoxx Europe 600 index closed down 1.4% at 460.8 points. In Paris, the CAC 40 and SBF 120 lost 1.3% and 1.2% respectively. The DAX 40 in Frankfurt shed 1.4%, as did the FTSE 100 in London. The stock market debacle at digital services company Atos (down 16.2%) continues unabated, with Tuesday's announcements concerning the planned sale of its historical activities and the strengthening of its balance sheet failing to reassure investors. JPMorgan lowered its recommendation for steel producer Aperam (-3.4%) from "neutral" to "underweight" and reduced its target price for December 2024 from €25.10 to €22.70. The European aerospace group Airbus (stable) confirmed on Wednesday that it had signed an agreement with the American group Voyager Space to set up a joint venture to build and operate the future Starlab space station. British defence group BAE Systems (up 6.4% in London) lifted its targets for 2023 after a strong first-half performance on the back of a record order book. The group also announced the launch of a £1.5 billion (€1.75 billion) share buyback programme.

U.S. stocks and bonds suffered a wave of selling after America’s credit downgrade, sending Treasury yields to the highest levels of the year and major indexes toward their worst session in months. The S&P 500 fell 1.4%, while the tech-heavy Nasdaq Composite lost 2.2%, its worst one-day performance since February. The Dow Jones Industrial Average shed 348 points, or 1%, dragged down by shares of Intel and Microsoft. The declines followed a global selloff in markets in Europe and Asia. Investors turned more cautious after the downgrade and a recent stretch of earnings results. Rising bond yields shift the calculus for many investors deciding where to park their cash at a time when the S&P 500 has rallied almost 18% this year. A stretch of strong economic data, debt sales and the U.S. downgrade have driven yields higher. AMD reported second-quarter sales and earnings that topped Wall Street estimates on Tuesday afternoon. But investors were evidently looking for more: AMD shares were down 7% on Wednesday. That followed disappointing results last month from peers Taiwan Semiconductor Manufacturing and Texas Instruments. Nvidia shares dropped 4.8%, while Micron Technology shed 3.7%. Apple and Amazon.com report earnings on Thursday, giving investors the next big read on how tech heavyweights fared this earnings season. Shares of Tupperware and Yellow tumbled around 32% and 16%, respectively, chipping away at their big run-ups in recent weeks.

After the previous day's slide, the Asian stock exchanges continue to go downhill in late business on Thursday. In Taiwan, the stock exchange remains closed due to an approaching cyclone. In China, the stock exchanges stabilised, with Hong Kong and Shanghai reporting index levels that were narrowly maintained. In the Special Administrative Region, Budweiser Brewing lost 5.5 per cent after the brewery posted lower first-half earnings due to higher costs. In the heartland, Yonghui Superstores shed 5.3 per cent as the company denied reports of a possible takeover by JD.com. In Japan, the Nikkei-225's decline continues almost unabated, this time with a further 1.2 per cent drop. After a 53 per cent slump in profits in the first quarter, TDK plunges 10 per cent. Sumitomo Electric Industries lost 6.5 per cent - here earnings plummeted by 90 per cent. Meanwhile, South Korea's Kospi drops another 0.5 per cent.

Yields on long-dated Treasuries ended at almost nine-month highs on Wednesday, as traders assessed a downgrade to the U.S. government’s credit rating by rating agency Fitch and a better-than-expected private-sector employment report. The 10-year Treasury note yield rose by 3 basis points to 4.095%, while the yield of the 30-year Treasury bond edged up by 6 basis points to 4.614%. The 2-year Treasury note yield fell by 3 basis points to 4.883%.

UBS raises Kardex target to CHF 245 (222) - Buy

HSBC upgrades Nestle to Buy (Hold)/Franc 120 (119) target

Dt. Bank lowers Lonza target to CHF 610 (670) - Buy

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