Instant view: Moodys keeps U.S. AAA rating, outlook negative
NEW YORK (Reuters) - Moody's Investors Service said it had confirmed the United States' triple-A rating but assigned it a negative outlook after lawmakers passed a deal to raise the U.S. borrowing limit and reduce the deficit.
OLIVER PURSCHE, PRESIDENT AT GARY GOLDBERG FINANCIAL SERVICES IN SUFFERN, NEW YORK:
"From our perspective they (the ratings agencies) have lost a significant amount of credibility, not just over the past few months but over the past few years. We are not putting any weight on it and institutional investors as a whole are not going to put a whole lot of weight on that kind of statement. However, putting in context of the all events and the overall nervousness and discontent that is going on in the markets right now I do expect there to be a short-term impact to the downside."
QUINCY KROSBY, MARKET STRATEGIST AT PRUDENTIAL FINANCIAL IN NEWARK, NEW JERSEY:
"Because it had been discussed as a possibility, I think the market was ready for this. The market is now much more focused on the employment number on Friday morning and economic fundamentals and how deep is this soft patch. The U.S. market is focused in Europe, the weakness in Europe and on Friday's number.
"That had been very much talked about in the market, the negative outlook, that if we were going to be triple-A there was going to be a negative outlook. the market had already factored that in.
"If S&P doesn't downgrade, I'm sure there will be a negative outlook as well. The fact that S&P said they were misinterpreted is indicative of S&P wanting more flexibility, probably not wanting to downgrade. Many believed S&P had put themselves in a corner. But by saying there was a miscommunication they were trying to give themselves some flexibility."
STEVE BLITZ, SENIOR ECONOMIST, ITG, NEW YORK Continued...