Fitch downgraded the US from AAA to AA+ late yesterday

[Aitrus]

https://www.fitchratings.com/research/s ... 01-08-2023

The last time a downgrade from the Big Three for the US was on 5 August 2011. The market took a big hit the next trading day, with the S&P falling 6.5%. The difference then was that the market was already going through some rough times, having been on a bear run since May. The market bottomed out from the August fall in mid-October, and it was a rough climb up from there to the end of the year. 2012 recovered nicely.

[Vic]

Sensing some entry points after market settles and back up by year end

[bloobs]

Sensing some entry points after market settles and back up by year end

Agree. IMO, this is just a reversal to the (20-day/ or 50 day/) mean after such a spirited run. All this credit downgrade does is officially codify the sad state of the US IDR--which EVERYONE has suspected or predicted for many years now. No surprise and certainly deserved. The market needed a boogeyman to pause and regress a bit.

Of course, it is probably going to overreact well past beneath the 20 or 50 day MA to the same degree that it overreacted to the highs it did a week ago--so this is gonna hurt in the short term for those who did not get out in time.

[Aitrus]

Agreed. There's a lot of things that Fitch lists as the reasons why they downgraded, with more reasons to be pessimistic (they project a mild recession by 4Q23 or 1Q24). However, "this too shall pass" seems to be the way to get past it.

[jimcasada]

This actually is significant news, because it will most likely raise the interest rates the US will have to pay on our future debts, thus making whatever gains these politicians thought they may have achieved null & void. Judging from all the finger-pointing political responses aired today from both sides, I think the worst may yet to come. I'm staying in G for now.