Making Sense Of It All

After a brutal week in global equity markets (the S&P 500 Index fell 7.2% on the week, and is down 11.3% since July 7th), the decision by Standard & Poor’s to downgrade U.S. Treasury debt has added yet another layer of fear and uncertainty to an already volatile market. In the weeks ahead, markets will be monitoring efforts by European policymakers to deal with their debt crisis, new data on the pace of the U.S. economy and any potential efforts by the Federal Reserve to support the economy and markets here at home. In the midst of all this, a strong earnings season and a steep selloff in stocks, coupled with a rally in bonds, have left relative valuations at extreme levels.
Click here to read the rest of J.P. Morgan's analysis of S&P's decision to downgrade the United States credit quality, along with the problems the global economy is facing.
Steven Karsh