“It wasn’t raining when Noah built the ark” — Warren Buffett

1. S&P cuts Japanese auto outlook to negative — Standard & Poor’s Ratings Services cut its outlooks on six Japanese auto companies, including Toyota Motor Corp. (7203.TO, TM) and Honda Motor Co. (HMC, 7267.TO), to negative due to production cuts following the March earthquake and tsunami.
The move indicates the increased likelihood of a downgrade for the automakers and suppliers, who have struggled with parts shortages since last month’s disaster. A host of companies in the electronics, industrial and other sectors have face supply-chain problems in the wake of the catastrophe.
2. Misrata, Libya under rebel control — the battle for Libya continues to shake the Middle East as Gaddafi forces bombarded rebel troops along a ferociously contested strip of Misrata Sunday.
3. Greek deficit exceeds forecasts — Greece’s budget deficit in 2010 was 10.5% of GDP, significantly higher than estimated by either the Greek government or the EU. The latter had calculated a figure of 9.6% for 2010 and forecast the deficit would be 7.6% at the end of this year.
4. S&P slashes Japan outlook — S&P cut its outlook on Japan to Negative from Stable, and affirmed the country’s AA- rating, warning that the cost of last month’s earthquake will further hurt weak public finances unless divided politicians agree to raise taxes. Japan’s public debt, already double the size of its $5T economy, could increase even more to pay for reconstruction costs – estimated by S&P at ¥20-50T ($245B-$613B) vs. the government’s ¥16-25T estimate.
5. Bernanke navigates first ever conference — Ben Bernanke avoided any serious gaffes at the first ever post-FOMC press conference by a Fed Chairman. Bernanke said rates would stay at 0-0.25% for another “couple of meetings” at least. He also expects the end of QE2 in June to have little impact on markets.
6. EU opens CDS probe into 16 banks — the European Commission has opened two antitrust investigations into the market for credit default swaps. The probe includes 16 major U.S. and European banks, including JPMorgan (JPM), Barclays (BCS), HSBC (HBC) Citigroup (C) and Goldman Sachs (GS).

The week ahead — Economic data from Econoday.com: