Markets have been spooked by one of the three major credit ratings agencies, Fitch, which has downgraded the US government’s credit rating. They have taken it from the highest possible rating of AAA to one notch down at AA+. They claim the downgrade is mostly owing to the heavy debt situation that the US government finds itself in, as well as the general financial situation of the government. Whilst the downgrade doesn’t mean anything especially tangible, it may cause investors to question their unwavering belief in the stability of one of the world’s leading economies.
Uber announced yesterday that it had successfully achieved operating profits in the second quarter of 2023, which is the first time in the company's 14 year history. They have been notoriously unprofitable, having undercut costs in the taxi industry, and benefitting from years of ‘cheap money’ in the startup scene. Their cost cutting measures in recent times have led to this profitability, and hopefully a stronger future too.
Pizza chain, Dominos, saw share prices climb by nearly 9% on the back of strong earnings announcement. Whilst the soaring price of cheese has hampered profits over the last year, the easing prices of dairy and other products, like avocado, has helped Dominos to claw back a strong position. Meanwhile, bakery chain Greggs saw share prices tumble 7% after announcing their profits. Whilst their earnings were relatively sturdy, the effect of rising food costs has really eaten significantly into their net profits. As Domino's shows, the easing food inflation could mean the pastry maker's results get a little tastier before the end of the year.
Sources: Financial Times, AJ Bell, IG, Nasdaq, Wall Street Journal, Investors Chronicle, Yahoo finance