Moody's Downgrades NYC Credit Outlook to Negative
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 27 2025
0mins
Should l Buy MCO?
Source: SeekingAlpha
Moody's Corp shares fell 5.07% as the company hit a 5-day low amid broader market declines.
The decline follows Moody's decision to downgrade New York City's credit rating from 'stable' to 'negative' due to significant projected budget gaps and increased spending forecasts. This credit rating change raises concerns about the city's financial stability, which could have broader implications for municipal bonds and related financial markets.
Investors are reacting to the potential impact of this downgrade on municipal finance, as it may lead to higher borrowing costs for the city and affect investor confidence in similar entities.
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Analyst Views on MCO
Wall Street analysts forecast MCO stock price to rise
10 Analyst Rating
8 Buy
2 Hold
0 Sell
Strong Buy
Current: 432.050
Low
526.00
Averages
586.50
High
660.00
Current: 432.050
Low
526.00
Averages
586.50
High
660.00
About MCO
Moody's Corporation is a global integrated risk assessment company. It is a global provider of research and insights; data and information, and decision solutions, which help companies make decisions. Its MA segment provides data, intelligence and analytical tools to help business and financial leaders make decisions. MA consists of a premier fixed income and economic research business (Research & Insights); a data business powered by databases on companies and credit (Data & Information), and three cloud-based subscription businesses serving banking, insurance and KYC workflows (Decision Solutions). Its MIS segment is a global provider of credit ratings, research, and risk analysis. It publishes credit ratings and provides assessment services on a wide range of debt obligations, programs and facilities, and the entities that issue such obligations in markets worldwide, including various corporate, financial institution and governmental obligations, and structured finance securities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Weak Labor Market: The latest jobs report reveals a loss of 92,000 jobs, significantly below economists' expectations of a gain of 59,000, with the unemployment rate ticking up to 4.4%, indicating a downward trend that reflects economic slowdown.
- GDP Revision: U.S. GDP growth has been revised down from 1.4% to 0.7%, showcasing a lack of economic momentum, and coupled with inflation remaining above the Federal Reserve's 2% target, this adds to market uncertainty.
- Impact of Energy Prices: The Iran war has disrupted 20% of the world's crude oil supply, pushing prices to nearly $120 per barrel, and historically, every U.S. recession has been preceded by spikes in energy prices, suggesting that unless the situation resolves quickly, recession probabilities may rise further.
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- Weak Labor Market: The latest jobs report reveals a loss of 92,000 jobs, starkly contrasting with economists' expectations of a gain of 59,000, while the unemployment rate has ticked up to 4.4%, indicating economic slowdown that could dampen consumer confidence and spending.
- GDP Downgrade: Recent GDP growth has been revised down from 1.4% to 0.7%, reflecting sluggish economic performance, and coupled with inflation remaining above the Federal Reserve's 2% target, this raises concerns about the economic outlook, potentially leading to investor caution.
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- Investor Sentiment Shift: As economic instability arises from the war in Iran, investors are retreating from riskier stocks, pushing the Nasdaq into correction territory, prompting a reevaluation of Arm's long-term investment value.
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- Economic Slowdown Expectations: Economists have raised the likelihood of a recession in the next 12 months, with Moody Analytics estimating recession odds at nearly 49%, heightening investor concerns regarding Arm's future performance.
- Inflation Forecast Adjustment: The OECD has projected U.S. inflation to reach 4.2% by 2026, significantly above the Federal Reserve's forecast of 2.7%, which may undermine investor confidence in high-risk tech stocks.
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