Stocks closed out this Friday the 13th modestly lower despite some significant downside events. The Dow Jones Industrial Average fell 0.39% to 12,422, the S&P 500 fell 0.49% to 1,289, and the Nasdaq fell 0.51% to 2,710.
"To move the market, you must surprise the market" a wise Wall Street veteran once told me. To his credit, that simple adage stands the test of time and today was no exception.
Not long after the market opened lower this morning and was trying to quantify the disappointment of JP Morgan's (JPM) fourth quarter earning results, a swirl of headlines began to circulate about possible credit rating cuts across the Euro Zone that briefly spooked the market. Briefly, until traders recalled that they had already seen this movie, because once they did it was on to other things
Bravo, Wall Street. How rational you have become.
Don't get me wrong, I am not trying to minimize the impact and ramification that the downgrades will have on the citizens and institution of the effected countries, I am simply saying that it was well telegraphed and therefore, not a surprise, and thus, not a market-moving event.
Had Germany been unexpectedly stripped of it's AAA-rating however, that would have been an entirely different matter. But for S&P to take aim at the credit worthiness of France, Italy, Spain or Portugal, the only question being asked is ''what took so long?"
Instead, we have been allowed to stick with our existing narrative which is the presumption that Europe's problems are, at the least, not worsening. As a result, traders can continue to bid up stocks, just as they have been for the past three weeks.
If I had to guess, I'd say it would probably be something to do with earnings season, which by the way kicks into high gear next week with 43 S&P 500 companies reporting results - half of which are Financials.
That ought to be interesting.