14 Jan 2012: S&P downgrade seven EU nations

FTSE 100 5673 Down 46bp
S&P 500 1289 Down 49bp
NIFTY 50 India 4866 Up 72bp

Major Stories

  • S&P downgrades France among seven others
    • France and Austria downgraded from Triple A to double A+ (negative outlook)
    • Spain, Italy downgraded 2 notches, while Portugal is now rated ‘junk’
    • Germany, Luxembourg, Finland, and Netherlands maintained their AAA ratings
    • Some EU officials feel that these ratings are ‘inconsistent’ as all the austerity measures have not been taken into account
  • Greek default threat grows
    • After Greece’s restructuring talks broke down, Athens looks likely to default on its debt; this is the first time in 60 years that a developed country will default on its debt
    • IMF says that either the Greek bailout has to be larger than the previously suggested Euro 130bn, or the investor losses much larger
    • Euro 14.4bn worth of Greek bonds mature in March; a restructuring was hoped for before that, so that atleast some of those bonds could be refinanced
  • JP Morgan’s earnings drop
    • Poor trading results see JPM’s profits drop 23%
    • Earnings are down to 90 cents per share from $1.13 per share in Q4 YoY
    • Investment banking was down from $6.2bn to $4.4bn in revenue

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