The S&P 500 enjoyed a nice rally following Tuesday's statement from the Federal Reserve. However, after today's decline, those gains have now been erased. The primary catalyst for today's sell-off is a cut in the outlook for General Electric (GE) by Standard & Poor's (S&P), where they said there is at least a 33% chance that GE will have its AAA rating cut in the next two years.
Many have argued that the statement from S&P is old news following Jeff Immelt's comments from December 16th. Regardless of whether or not S&P's comments are 'new' news, it's amazing that even after the events of the last several months, the ratings agencies have any credibility at all. In our view, the only certainty that can be drawn from S&P's statement is that GE is being run by people who at minimum have the intelligence of cows.
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