The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?
What's happening: Standard & Poor's cut Spain's sovereign credit rating for the third time in as many years. The action brings Spain's rating down to AA-, and S&P continues to list the country's outlook as "negative."
In plain English, please: When it comes to Europe's fiscal crisis, we hear a heck of a lot about Greece. And that makes perfect sense, since that country is in the direst financial position. However, it's important to remember that it takes more than a "G" to make up PIIGS (which stands for Portugal, Ireland, Italy, Greece, and Spain). S&P's downgrade is a reminder that other, much larger, economies in the EU aren't in terribly good shape, either, and that a solution for Greece's woes means more than just respite for that country.
In theory, a credit downgrade means that Spain could face higher borrowing costs to reflect the country's dicier outlook. I say "in theory," though, because that will happen only if bond investors haven't already been factoring in the concerns that led to S&P's adjustment.
Stocks to watch: What's bad for Spain broadly is bad for the country's businesses. Major Spanish banks like Banco Santander
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