Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it. Warren Buffett

1. Fitch Keeps U.S. AAA Rating — Fitch rated the U.S. at AAA, but added that the absence of a deficit-cutting agreement by 2013 and the further deterioration of the economic and fiscal situation likely would mean a downgrade.
2. Italy 3-yr auction yield jumps to record 7.89 pct — according to Reuter, the yield on a new three-year BTP soared to euro lifetime high of 7.89 percent at the closely watched auction which allowed Rome to raise 7.5 billion euros. Only a month ago, Italy had paid a 4.93 yield to sell three-year paper.
3. Central Banks Take Action to Rescue Financial Markets — a global consortium of central banks agreed to lower interest rates in temporary U.S. dollar liquidity swaps – an exchange between central banks used to maintain currency liquidity – effective Dec. 5. The joint action, led by the Federal Reserve, the banks of England, Canada, Japan, as well as the Swiss National Bank and the European Central Bank, is an attempt to “ease strains on financial markets” and “mitigate the effects of such strains on the supply of credit to both households and businesses,” the Fed said in a statement.
4. S&P downgrades global banks — S&P lowered the rating on 37 of the largest financial institutions in the world, including almost all major U.S. banks, with Bank of America (BAC), Citigroup (C), Morgan Stanley (MS) and Goldman Sachs (GS).
5. China factory sector contracts for first time in nearly 3 years — according to Reuter, China’s factory sector shrank in November in the face of weakening demand both at home and abroad. China’s official PMI dropped to 49 in November from 50.4 in October

The week ahead — Economic data from Econoday.com: