The US has been the gold standard of global credit for more than 70 years. But on Aug. 5, Standard & Poor’s (S&P) downgraded the US’ sovereign credit rating from AAA to AA+, prompting a global selloff in equities. Following a spate of weak economic data that suggested that the odds of another recession were rising, the downgrade sent markets into a tailspin.

But investors shouldn’t have been surprised by the move. S&P had signaled for months that it would downgrade US credit. The agency assigned a negative outlook to US debt in April and placed the US on its CreditWatch list in July. As politicians bickered over whether to raise the US debt ceiling, S&P made it clear that a $4 trillion deficit reduction would be necessary to maintain the AAA rating. After Washington delivered a $2.1 trillion debt-reduction deal, S&P simply stayed true to its word.

The downgrade strikes a blow to the country’s creditworthiness and credibility. But more troubling are the knock-on effects that could result from the downgrade. On Aug. 8, S&P downgraded farm lenders and mortgage debt issued by Fannie Mae and Freddie Mac, as well as a raft of banks and credit unions, and three major clearing-houses that execute trades in stocks and bonds. A number of municipal debt issuers saw their ratings cut as well. The one trait shared by all downgraded entities was a reliance on federal spending.

The downgrade may prove a blessing in disguise. The research note that accompanied the downgrade clearly stated that the move was tied to political “brinksmanship” in Washington; it’s an assessment of the political class and not the economy. Perhaps the downgrade will force US politicians to compromise and govern more effectively.

It’s a bleak picture, but there are bright spots in the market that haven’t received attention from the media or many investors.

About three quarters of the S&P 500’s constituent companies beat earnings estimates in the second quarter on tighter cost controls and improving demand. Corporate balance sheets remain solid with large cash positions and low debt levels. Regional data indicates manufacturing activity is improving slowly and the Leading Economic Index is on the rise.

The market faces daunting macro-level headwinds. But investors will be best served by looking toward micro-level factors. Focus on companies with solid balance sheets and respectable growth prospects.

The market turmoil presents and excellent buying opportunity, particularly for rock solid, large-cap dividend-paying stocks. Investors who tune out the noise and political rhetoric will book impressive gains when the dust settles.