Wellington Management: Reality Bites - US Debt Downgrade

While widely anticipated, downgrade by Standard & Poor’s to AA+ has sent shockwaves across global markets. Global equities and commodities (excluding gold) have fallen 16% and 19% from mid-July levels, respectively, while government bond yields have rallied 37 bps and the Swiss franc has risen 14%. These dramatic moves reflect extreme risk aversion in the markets. But is the debt downgrade the direct cause of market turmoil or simply a catalyst? What else is going on, and what might we expect going forward? 

Click here to read this informative article from Wellington Management.

Steven Karsh