Week Sept 23 2011 – Weekly Recap & The Week Ahead
“If everyone is thinking alike, then somebody isn’t thinking.” George S. Patton
1. S&P cuts Italy’s sovereign credit ratings — S&P lowered Italy’s long-term credit rating to A from A-plus and cut its short-term rating to A-1 from A-1-plus, citing a weak economic outlook and ongoing political gridlock. S&P also said the outlook for Italy’s ratings is negative, meaning a further cut is possible.
2. Japan’s trade deficit widens — Japan’s trade deficit gapped wider than expected in August, coming in at ¥775.3B ($10.1B) vs. July’s ¥72.5B surplus, as growth in exports weakened. Exports rose 2.8% Y/Y and imports jumped 19.2%.
3. Fed decides on $400 billion bond swap — the Fed said it will buy $400 billion of Treasury securities in the 6- to 30-year range and sell an equal amount of maturities of 3 years or less. The purchases would be completed by the end of June 2012.
The Fed also announced a new plan to purchase agency mortgage-backed securities with proceeds of maturing securities.
4. Moody’s downgrades BAC, WFC & C — Moody’s downgraded Bank of America (BAC) to Baa1 from A2. The move comes from a decrease in the probability the government would support the bank, if necessary, but “do(es) not reflect a weakening of the intrinsic credit quality of BofA.” Moody’s cut Wells Fargo (WFC) to A2 from A1 for the same reason. With Citigroup (C), Moody’s confirmed the company’s long-term rating, saying the bank’s stand-alone credit profile has improved, but downgraded the holding company’s short-term rating to Prime-2 from Prime-1.
5. Moody’s Cuts Eight Greek Bank Ratings by 2 Notches — in a widely expected move, Moody cuts The agency cut National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, Piraeus Bank, Agricultural Bank of Greece and Attica Bank downgraded to Caa2 from B3.
The week ahead — Economic data from Econoday.com:
