I personally think that the Dow is going to rally (anywhere between 50-300points on Monday). My reasons for this are that 1stly the 1,000points crash last week was based almost exclusively on the risk of *this happening, therefore a downgrade was already priced in. However MUCH MORE IMPORTANTLY something which most of the fools on here seem to have totally overlooked is the fact that the USA's credit rating HAS NOT ACTUALLY BEEN DOWNGRADED!! There are the 3 credit ref agencies that rate USA and others, and yes whilst 1 of them has downgraded USA 1 notch, BOTH of the other 2 agencies made the physical decision and choice to reject the option of downgrading usa, and instead both opted to ''re-affirm'' their rating of usa as AAA+. And so the fact that only 1 of 3 chose to downgrade means that the ''downgrade'' is totally meaningless and has no actualy physical or financial consequences on USA. (As the interest rate on the debt will not be affected since they (usa) are allowed to use the highest rating that they hold. And so until/unless ALL 3 agencies downgrade USA, there is no actual change.
USA traders don't really give a toss about Spain or Italy! Lol Both countries will do fine anyways as they make enough money from summer holiday tourism to keep them doing ok.
As someone noted already this was a political move by S&P to justify future downgrades of G-7 countries like France and Italy. There is a lot of propaganda reminiscent of the cold war tactics. European debt combined is larger than the US debt. At the same time, Europe has structural problems. Everyone is blaming the US for its huge debt but they cunningly overlook the fact that EU nations are in a worse hole. If there is substantial reallocation of funds between bonds and stocks Monday there is the possibility techs will soar with nas-100 moving up 5% or even more for the week. I can't say about the dollar. I suspect it may plunge to new lows.
My view, techs are going to get hit the worst. Dow stocks might be down a modest 2-3%. Big winners will be the emerging markets, Asian, and Canadian stocks. This is the beginning of what I would term, "the great disconnect". One thing I've observed in the past 2-3 years has been extremely tight correlation between the US market and the rest of the world. This is coming to an end. The USA obviously doesn't offer an attractive place preserve or grow capital, so it seems doubtful that they're going to attract much of it going forward.
This appears to be a group of people who are long trying to somehow justify how they can still hold on to their positions.
Dude, sorry to be so disgraceful. But emerging markets will experience a clusterfcuk on monday. Watch my words!! FYI, Saudi markets are closed on friday (its a muslim country) and open on saturday. Find out what happened there on saturday.
could pop up for a few days. going down for 2 weeks non-stop is a bit too much. -11% :eek: the whole move down was likely all about this downgrade. a gap down to reverse violently by EOD, or a gap-up-up-and-away would make total sense.