Classic sell the rumor, buy the fact trading action. Within an hour after Moody’s downgrade of the French banks almost all the major global equity indices have turned up. S&P futures were down almost 16 points and are now down just 1.6 one hour into the European open. Let’s see how long it lasts, but it is usually the case when the ratings agencies show up it’s time to move on.
A lot of negative news is already priced, though certainly not Armageddon. If the Four Horsemen of the European Apocalypse don’t show up soon, those who have positioned for the worst case are going to have to square up. Stay tuned.