“Risk comes from not knowing what you’re doing” Warren Buffett

1. S&P Rating Downgrades US rating from AAA to AA+ — S&P lowered the U.S. long-term rating one level to AA+ after markets closed on Aug. 5 while keeping the outlook at “negative” as the New York-based ratings company becomes less confident that Congress will end Bush-era tax cuts or tackle entitlements. Below is the chart courtesy from Standard & Poor.

2. Factory activity slows across the world — hopes for global economic growth have taken a dent after factory activity in China and Europe decelerated in July and contracted in the U.K. Eurozone PMI fell to 50.4 from 52 in June, its lowest level since September 2009. New orders, an indicator for future prospects, contracted with a fall to 47.6. China’s official PMI dropped to 50.7 from 50.9 previously
3. DOJ intensifies Nortel patent investigation — the Justice Department is intensifying a probe into whether the six companies that recently bought $4.5B in patents from Nortel could use the IP to unfairly hinder smartphones that operate Android (GOOG).
4. EU not considering rescue plans for Italy, Spain — The European Union has no plans to provide rescue loans to Italy and Spain, despite the rising borrowing costs facing these countries, a European Commission spokeswoman said last Tuesday.
5. Swiss central bank battles to halt franc’s rise — The Swiss National Bank was pulled into Europe’s sovereign-debt crisis Wednesday, cutting its key lending rate to zero and taking other steps short of outright intervention in the foreign-exchange market to halt the Swiss franc’s rise to record levels versus the beleaguered euro.
6. Moody’s and Fitch affirm U.S. rating — with the Senate passing the debt deal and President Obama signing it into law, Moody’s and Fitch have confirmed the U.S. will keep its AAA rating. However, both said more deficit-reduction measures are needed and Moody’s assigned a negative outlook.
7. Bank of Japan expands asset purchases — The Bank of Japan boosted its asset-purchasing program on Thursday at a policy setting meeting that was cut short following the nation’s intervention to weaken the yen. The Bank of Japan raised its total asset-purchase program to approximately 50 trillion yen ($630 billion), from ¥40 trillion previously.
8. Dow Theory generates sell signal — both the Industrials and Transports hit new lows this week; Thus, generate the dreaded sell signal.

The week ahead — Economic data from Econoday.com: