“To win you have to risk loss.” — Jean-Claude Killy (skier)

1. S&P revises U.S. outlook to stable from negative — MarketWatch, Standard & Poor’s revised its long-term outlook on its U.S. credit rating to stable from negative. The rating agency downgraded the sovereign rating to AA+ from its top rating of AAA in 2011. The rating agency cited economic strength and the dollar’s status as a reserve currency as the primary drivers of the outlook revision.
2. Germany’s top court weighs ECB bond buys — Germany’s Federal Constitutional Court has started a two-day hearing today over the compatibility of the ECB’s Outright Monetary Transactions (OMT) program, which allows the bank to buy government bonds in the secondary market, with German law.
3. Senate Passes Bill to End Direct Payments to Farmers — the Senate overwhelmingly passed a $955B agriculture bill that would reduce farm spending by $18B over the next decade, partly by ending the practice of making direct payments to farmers irrespective of crop yields, market prices and the economy.
4. Nikkei (DXJ) plunges into bear market — The Nikkei’s 6.4% drop put it 21.9% off from its intraday peak reached on May 23. Uncertainty about the Fed’s QE program continues to grip global markets.
5. Fed Likely to Push Back on Market Expectations of Rate Increase — WSJ’s Hilsenrath, quoted officials as saying that a tapering of asset purchases doesn’t mean an end to asset purchases, and a hike in short-term interest rates isn’t anywhere close to being on the radar at this point.

The week ahead — Economic data from Econoday.com: