All I can say on the downgrade fallout is this from my article of July 30 on “What Would Happen If U.S. Defaults“:
After some days of uncertainty, market drops, rates go up 20 to 50 bps, media hysteria, bargain hunting, market surges, Treasurys stabilize, rates moderate after some weeks as money chases Treasurys again.
I was wrong about Treasurys, since the eurozone crisis helped propel money into U.S. debt, they weren’t fazed. I should have conferred with DoctoRx before I made that call. But chaos, yes.
Friday? Who knows. Here is tomorrow’s data release schedule. Nothing dangerous:
8:30 AM ET
9:55 AM ET
10:00 AM ET
I would expect inventories to rise, and based on Redbook/ICSC-Goldman and Gallup, retail sales will show very modest gains. Consumer sentiment will stink. We’ll see.