“Wait until you get a pitch right where you want it!” — Warren Buffett

1. Chinese Debt Balloons To Record High — the FT calculates China’s total debt grew to a record 237% of GDP in Q1 or 163T yuan ($25T). The surge in borrowing comes as the Chinese government yet again turns on the spigots in order to boost stuttering growth. What worries economists is not the size of the debt, which is comparable to the U.S. and the eurozone, but the speed with which it has accumulated. The Chinese figure was 148% at the end of 2007.
2. S&P Strips Exxon of AAA Credit Rating — Standard & Poor’s Ratings Services downgraded Exxon Mobil, the world’s largest publicly traded oil company, stripping it of its triple-A rating after decades with the pristine mark. S&P questioned Exxon’s decision to spend $54 billion on stock buybacks since 2012 even as its debt load swelled. Exxon’s preference for returning cash to shareholders may be hurting its ability to stockpile cash and pay down debt, the credit rating company said.
3. Fed Holds On Rates, Warns Economy Has Slowed — the Federal Open Market Committee said in a statement released after its two-day meeting this past week that the economy has slowed and reduced levels of consumer spending. The Fed again opted not to raise interest rates. The statement highlighted the many conflicting signs in the U.S. economy – consistent job growth and an improving housing market against slowdowns in business investment and exports.
4. BOJ Surprises Markets By Not Expanding Stimulus — the Bank of Japan (BOJ) surprisingly held off from increasing its monetary stimulus as it looks to take more time to understand the effect of its negative interest rates. Specifically, the BOJ let three key easing tools unchanged: its ¥80T ($732) target for expanding the monetary base, mostly through buying government bonds; the 0.1% negative interest rate; and a program to purchasing riskier assets such as stocks. The BOJ also put back to 2017 its timeframe for achieving its target of 2% inflation, the fourth delay in about a year.

The week ahead — Economic data from Econoday.com: