How will the market react to downgrade?

[Parkbandit]

So, how will the financial markets react tomorrow?

[prance1520]

I'm saying 2%. A lot of the fear is already built into the current prices since most firms were saying the US was going to have to pull a rabbit out of a hat to keep their AAA. Company profits are good, job reports are good, so there are positive points to hold on to. Not that 2% isn't a really bad day, but relatively I don't think it will get out of control.

[Parkbandit]

I'm saying 2%. A lot of the fear is already built into the current prices since most firms were saying the US was going to have to pull a rabbit out of a hat to keep their AAA. Company profits are good, job reports are good, so there are positive points to hold on to. Not that 2% isn't a really bad day, but relatively I don't think it will get out of control.

What job reports were "good"

I think this downgrade was more political than actual financial.. and it was released on a Friday to lessen it's impact. I still see it dropping significantly.. 5-7%

[prance1520]

http://money.cnn.com/2011/08/05/news...d=HP_Highlight

Job growth exceeded expectations by between 30-40k jobs. Its not all gravy now, but its about as good of news as we've gotten in terms of jobs in the past few years.

I agree its a political move meant to push Washington to let them know they aren't doing enough to balance the budget. If it does drop more than 2% or 3%, its based on long term fear and not on current market conditions (not that it isn't a valid reason, its just the market normally reacts more to current conditions than long term).

[Parkbandit]

http://money.cnn.com/2011/08/05/news...d=HP_Highlight

Job growth exceeded expectations by between 30-40k jobs. Its not all gravy now, but its about as good of news as we've gotten in terms of jobs in the past few years.

I agree its a political move meant to push Washington to let them know they aren't doing enough to balance the budget. If it does drop more than 2% or 3%, its based on long term fear and not on current market conditions (not that it isn't a valid reason, its just the market normally reacts more to current conditions than long term).

From your own link:



It wasn't as good as the media wanted us to believe.

[kookiegod]

I think it will be even.

I think this was the slap in the collective face of Congress to wake the fuck up and actually do what they were elected to.

The congressional approval rating is dismal, and I think come November 2012, unless things radically turn around, it could be the biggest blood letting in the history of US elections.

[Androidpk]

Where is the American spring?

[Parkbandit]

Where is the American spring?

It's worked so well for Egypt, Syria, Libya, Jordan, Yemen, etc....

[Androidpk]

It's worked so well for Egypt, Syria, Libya, Jordan, Yemen, etc....

Oh, you're right. We shouldn't even bother. Right.

[prance1520]

It wasn't as good as the media wanted us to believe.

Don't get me wrong, I don't think that report is signaling the return of America to greatness. It did however, exceed expectations (expectations were between 80k and 90k, actually was 117k). The market usually reacts very positively to this type of news, and that what we're analyzing, what the market will do, not how good the economy ACTUALLY is.

I won't be surprised if its down 5%, but I don't think it should drop that much. I'm counting on cooler heads to prevail and savvy investors sweeping in if it does take a plunge to pull it back up.