Stocks retreated early on Friday when word first hit our shores that S&P and Fitch were talking about some bond rating downgrades in Europe. As the day progressed, US stocks erased half of the earlier losses to still end the week in positive territory. Heck, even the European markets were barely in the red Friday on this “seemingly” bad news.
Why did stocks not sell off more?
I’m not saying that bond downgrades are a good thing. However, bond investors are way ahead of the agencies in understanding the risks at hand (as usual). So this is just tough guy posturing on the part of the agencies to show that they are relevant (after years of irrelevancy and mistakes). So I wouldn’t sweat these actions too much.
Looking ahead, US investors will have their attentions turned inward to determine the quality of this earnings season. The few early results to date have been underwhelming. If it stays on that path, then the recent rally will come to a halt. However, if we get more reports that reinforce or improve upon the 2012 estimates, then stocks will continue higher. |
发表于 2012-1-13 22:31
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