In one of the more ironic turn of events, the Standard & Poor's downgrade of US debt on August 5th caused the S&P 500 Index to fall 6.7% and the 10 year Treasury bill rose 2% (as of August 25th). Some strategists such as Liz Ann Sonders of Charles Schwab and Kevin Rendino of BlackRock are saying equities are oversold. Many people are saying that the downgrade was not based on the economic situation in the world but on the political gamesmanship in Congress. The fall in stocks was led by financials but also encompassed aerospace & defense, technology and energy sectors. If a recession can be avoided, then equities are looking cheap.
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