The US equity market is again severely haunted by EU sovereign crisis in the new year, that is the reason when S&P downgraded several European governments on Friday, DOW dropped by more than 100 points in the early morning trading time frame.
The close correlation of “shocking” on US equity market by the headlines of EU woes is surprisingly apparent. I think I might can take advantage of this correlation, pile up some cash beforehand and/or withdraw some cash from my portfolio before the bad news come out and then buy undervalued stocks and/or index funds when the equity market is dragged down by the news of EU woes.
Here I have found out the calendar of possible release of news on EU woes
- Fitch Reiterates Stance on France 01/12/2012, (http://online.wsj.com/article/SB10001424052970204542404577156231571570216.htm)
- Standard & Poor’s cut the ratings on nine of the 17 European countries that use the euro currency. France and Austria lost their AAA ratings, which were lowered one notch to AA+, and Italy and Spain had their ratings cut by two notches. Germany, Finland, Luxembourg and the Netherlands all retained their AAA status 01/13/2012, (http://www.nytimes.com/interactive/2012/01/13/business/nine-euro-countries-ratings-are-cut.html?ref=global)
- Fitch will probably downgrade Italy and Spain by the end of this month http://www.ibtimes.com/articles/281021/20120112/fitch-continues-warnings-italy-downgrade-catching-up.htm
- Moody will possible take shot at UK’s triple A ratings and it has placed all of its European ratings, not just those in the eurozone, under review. There is a possible downgrade soon even though I cannot find out when is the exact date. http://www.ft.com/intl/cms/s/0/0a42e062-2b3a-11e1-a9e4-00144feabdc0.html#axzz1jTSfsN5b
- The next EU summit will take place on January 30, 2012. The meeting would focus on employment in the European Union, where some countries may face zero economic growth and some even recession. http://en.rian.ru/world/20111221/170394272.html
- Talks between Greece and its creditor banks to slash the country’s towering debt pile broke down on Friday, with the Greeks warning of “catastrophic” results if a deal to swap bonds is not reached soon. A “tentative” plan to meet on Wednesday, but that it depended on events in the next few days. The alert date is 01/18. http://www.reuters.com/article/2012/01/13/us-greece-idUSTRE80C11O20120113
The bold words are my highlighted dates, I need to closely watch out the news when approaching these dates and get ready to buy or sell.
