Can the Fitch news blow up into something bigger for markets? Gautam Samarath explains

economictimes.indiatimes.com:

«I think you would have to contextualise what is happening today versus how we have got to this point. We have had a pretty strong and resilient global equity market so far this year,» says Gautam Samarath, M&G PLC.Global cues and macros are giving shivers to markets across the world, and India is no different. Is it justified? Can the Fitch news blow up into something even bigger or maybe we are paying too much attention to it right now? I think you would have to contextualise what is happening today versus how we have got to this point.

We have had a pretty strong and resilient global equity market so far this year. And I think the Fitch news in and of itself, I think Janet Yellen was out speaking yesterday in terms of what the impact actually is, the timing is a bit interesting to say the least. And actually, it is still very much investment grade.

Fitch is just trying to appear to do their job. Does it actually affect the US's ability to repay its debt not materially, but they are acknowledging that these debt standoffs are becoming more and more common. And so they are just trying to do their job.

Does it really affect the fundamentals? No, it does not. I think given where prices got to in equity markets, any piece of nervousness was something that the markets are going to hold on to. And so I would not read too much more into that than it is just a moment for pause in the markets and then latching onto that narrative in order to explain that pause in markets.Bank of America turned out to be the first major global bank to reverse their call as far as US economy is concerned. They believe that it may not head into a recession anymore. This on the back of just last week, we heard FedChairman Powell also say that they