The U.S. markets ended last week strong following the announcement that the U.S. debt rating could be cut. However, the forces that are pushing investors into international stocks persist. U.S. debt is still out of control, growth rates are still higher abroad and the U.S. dollar continues to make investing in stocks priced in non-dollar currencies the better choice. Uncertainty Sends Investors Into Global Stocks
The U.S. dollar is now approaching its lowest level in 30 months thanks in part to S&P’s decision last week to lower its outlook on U.S. debt. S&P effectively gave the United States two years to get its fiscal house in order and enact meaningful change or be downgraded.
Naturally, President Obama was not too happy about this decision and quickly dispatched Treasury Secretary Tim Geithner to CNBC in an attempt to do damage control. Interestingly, Geithner said that there was “no risk” that the United States’ AAA credit rating would be downgraded. Read