I’m not surprised Fitch finally downgraded the U.S. credit rating to AA+ from AAA+.
The main reason that didn’t happen right after the S&P downgrade in 2011 is because…
The dollar retained its position as the world’s reserve currency.
But that “exorbitant privilege” — as the French put it — can vanish in a flash if the markets perceive a broader decline in America’s ability to meet its financial obligations.
In the meantime, if Wall Street and Washington’s reaction to the credit downgrade erased some of your cash in the markets…. I’ve got some good news for you.
Large caps on our radar are on track for the highest earnings in two years.
Hence, The Headlines Are Just Another Distraction
From New Profit Opportunities Hidden in Plain Sight
Just look at what our trading roadmap picked up before the credit downgrade.
As I told my clients yesterday, the market has been on a tear all year.
July was the fifth straight month of gains for the S&P 500 and the tech-heavy Nasdaq…
Driven by better-than-expected earnings and hopes of a soft landing for the economy.
And the pullback you see in the chart above — right before the significant push higher — would’ve happened with or without the credit downgrade from Fitch.
Sometimes it’s healthy to have this digestion in the market…
As it brings down valuations a bit and allows for dip-buying.
But if you sustained losses from the pullback, the good news is you can still profit from the upside of this earnings season by targeting companies with robust cash flow.
Original Post Can be Found HERE