Anxiety Prevails On First Day Of Trading Since Downgrade
CHICAGO (CBS) -- All signs point to another rough day in the financial markets Monday morning, on the first day of trading since the historic U.S. credit downgrade.
As CBS 2's Susanna Song reports from LaSalle Street, economists say all signs point to a sharp decline when trading begins.
"This is kind of uncharted territory," said Strategas Research chief investment strategist Jason Trennert.
On Friday evening, Standard & Poor downgraded the U.S. credit from AAA to AA+, for the first time ever. Investors will no doubt be watching the market cautiously Monday, and the reaction on Wall Street is anybody's guess.
The head of S&P's ratings committee said if the U.S. does not get its fiscal house in order, its rating could be downgraded again within six months.
"The outlook includes at least 1/3 chance of downgrade over that period," said Standard & Poor managing director John Chambers.
Economists say we are in uncharted territory, and have no choice but to persevere through the days and weeks of volatility to come.
"The good news about the downgrade, if you can see any good news in it, is that it will focus the mind of policy makers to deal with its long-term problems," Tennert said.
All that said, both Canada and Japan had their credit downgraded, and saw their markets make gains, so anything can happen.
Financial planners say unless you are retiring soon, people who still stick with their investment plan will likely see their portfolios recover in the long run.
