“The secret to business is to know something that nobody else knows.” — Aristotle Onassis

1. Fitch warns on U.S. outlook following debt-talks failure — the Congressional supercommittee confirmed it wouldn’t be able to agree to a deal to make $1.2T in budget savings. The announcement prompted Fitch to reiterate its warning that such a failure would probably lead to “a revision of the (U.S.’s) rating Outlook to Negative,” although a downgrade is less likely.
2. Moody’s warns on French rating outlook — Moody’s warned France last Monday that a sustained rise in its debt yields coupled with weakening economic growth could harm its ratings outlook, fuelling concern the euro zone’s second largest economy might lose its coveted AAA status.
3. Lawmakers abandon deficit-cutting effort — according to Reuter, the Supercommittee abandoned their high-profile effort to rein in the country’s ballooning debt in a sign that Washington likely will not be able to resolve a dispute over taxes and spending until 2013.
4. Eurozone debt crisis hits Germany in disastrous bond auction — an auction of German government bonds technically failed, underlining fears that Europe’s long-running sovereign debt crisis now threatens the core of the euro zone.
5. Fitch: French rating at risk if crisis worsens — Fitch Ratings said that France’s triple-A credit rating would be at risk if a further intensification of the euro-zone crisis resulted in a much sharper economic downturn in France and a material increase in the risk of contingent liabilities.
6. Manufacturing contracts in Europe and China — data showed that the eurozone’s manufacturing PMI fell to 46.4 in November from 47.1 in October. Markit said the data suggests that the eurozone is contracting at 0.6% in Q4 2011. “Malaise has spread from the periphery to the core, with Germany stagnating and France contracting by around 0.5%,” Markit said. China’s PMI was just as gloomy, falling to 48 in November from 51 in October.
7. Fed targets large banks with stress-test according to the Fed, new bank stress tests in which lenders will be forced to model a severe eurozone recession – a 6.9% decline in real GDP – and a skying domestic unemployment rate. In addition, the six largest U.S. banks will need to estimate losses “stemming from a hypothetical global market shock,” similar to that of late autumn 2008.
8. S&P warns of Japan Downgrade — Standard & Poor’s said Japanese Prime Minister Yoshihiko Noda’s administration hasn’t made progress in tackling the public debt burden, an indication it may be preparing to lower the nation’s sovereign grade.
9. S&P Downgrades Belgium — S&P cut Belgium’s sovereign rating to AA from AA+, citing broader financial market pressures.

The week ahead — Economic data from Econoday.com:

This entry was posted on Monday, November 28th, 2011 at 3:12 pm and is filed under Weekly Summary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.