Good morning. Here’s what you need to know.
- Asian indices were down in overnight trading with the Shanghai Composite plummeting 3.79%. Major European markets are sharply lower. US indices are as well.
- S&P downgraded U.S. AAA credit rating, despite the White House’s claims that its analysis was off by trillions. S&P confirmed the error but maintained its downgrade. Treasury Secretary Tim Geithner said S&P showed poor judgment in its downgrade. U.S. futures are down on the news, but yields on treasuries are lower after the downgrade, meanwhile talks are about France being the next to lose its AAA credit rating. Don’t Miss: A thorough look at the downgrade and what it means for the economy >
- The European Central Bank has announced plans to intervene in various sovereign debt markets under its Securities Markets Programme (SMP). The new programme would allow the ECB to buy Spanish and Italian debt following reform commitments by the two nations. Meanwhile, selling in European markets hasn’t eased with Germany down about 2.4%, France, 1.8%. Yields on Italian bonds however fell. Now here is the sad story of how Italy got to be such a wreck >
- G7 leaders announced last night that they will take co-ordinated action to ensure liquidity and support global financial markets. U.S. futures were down 2.7% at one point, but selling eased on the news. Check out the 15 biggest deficits in the developed world >
- AIG is planning to sue Bank of America over hundreds of mortgage backed securities. AIG aims to recover more than $10 billion in losses on $28 billion of investments.
- National Indemnity Co., a unit of Berkshire Hathaway Inc., has made a $3.24 billion bid for Transatlantic Holdings Inc. The $52 per-share bid, tops Transatlantic’s $44.22 per share agreement with Allied World Assurance Company Holdings Ltd., and a $46.36 per share offer by Validus Holdings Ltd.
- Rio Tinto and Mitsubishi Corp have made a $1.56 billion bid for Australian mining company Coal & Allied. The offer is a 34% premium on Coal & Allied’s last trade, and is an effort by both companies to buy out the 14% of the company they don’t already own, to gain from strong coal prices.
- After S&P downgraded the U.S., Moody’s has warned again, that it could downgrade the U.S. before 2013 if the fiscal or economic outlook weakened significantly. The ratings agency said the U.S. needs to find more deficit cuts.
- Dollar Thrifty Automotive posted Q2 net income of $42.5 million, or $1.36 a share, from $42.3 million, or $1.40 a share, a year ago. Revenue fell to $395.1 million. The company has received takeover bids from Avis and Hertz.
- Gold climbed to $1,700 an ounce after S&P announced its downgrade of the U.S. as investors looked for a hedge against U.S. equities and the dollar, and amidst concerns that the global economy is slowing. Check out the 10 biggest gold hoarding countries in the world >
- BONUS – Scarlett Johansson and Ryan Reynolds are reportedly rekindling their romance just five-weeks after their divorce was finalised.