US Credit Downgrade in Context
Stock markets declined for a third straight day Monday (August 8) in reaction to Standard & Poor's largely symbolic credit downgrade of the U.S. after Friday's market close. The downgrade was made on the grounds of political turmoil rather than the inability of the US to meet its credit obligations.
Largely Symbolic Move
When a debt downgrade comes, the worst is usually over. Very similar to a war: When the cannons first fire it is time to buy the market. The US government is still the strongest credit in the developed world and the two other rating agencies have left its rating at AAA.
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IN FOCUS
The attached In Focus piece puts the issue in context. Thanks for reading. If you have any questions, please contact your portfolio manager.