Update: On TV this morning, there was chatter about an S&P downgrade of the US after the close.
This is a rumour that’s going around, but there’s real no basis to it, other than what people are talking about.
In our original post we incorrectly stated that a Barclays analyst had acknowledged the possibility.
However the analyst, Barry Knapp, did not say anything on the matter.
It’s being talked about, but there’s no real basis to it, and Barclays is not pushing the rumour or acknowledging it in anyway.
Original post: From Barclays comes a theory about why markets aren’t up today despite that (relatively) strong employment report.
Markets coming off on back of rumour of S&P downgrade of USA after the close tonight. To be honest it would not come as a complete surprise as S&P always said that the chance for a cut is 50:50 and they also said that they wanted the US Govt. to cut the expenditures by at least 4 trillion – they now cut it just shy over 2 trillion. So to be consistent and not to loose their credibility S&P actually need to cut the ratings…. But our anlyst think that the impact on Treasury market would be limited as a. Fitch and Moodys already re-affirmed ratings and b. there is just no alternative to the US treasury… so it would be more kind of a sentiment issue…
Take with requisite grains of salt, etc.