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Good morning. Here’s what you need to know.
- Asian indices were down in overnight trading with the Hang Seng falling 2.06%. Europe is trading higher and U.S. futures opened lower.
- Moody’s cut Japan’s sovereign debt rating to Aa3 from Aa2, with a stable outlook. Moody’s attributed the downgrade to large budget deficits and the build up in government debt since the 2009 global recession, the Nikkei fell 1.07% on the news. Check out the ultimate bear case on Japan >
- Following the downgrade, Japan unveiled a $100 billion plan to boost M&A activity and help companies cope with a surging yen (which wasn’t fazed by the downgrade). The government will release foreign-exchange reserves to the Japan Bank for International Cooperation.
- German Chancellor Angela Merkel rejected demands that Greece provide collateral for emergency loans as members of her Cabinet split on the issue. Meanwhile, Eurozone governments are discussing plans to have non-cash Greek government assets, like real estate, as collateral instead. Don’t miss: The most miserable countries in Europe >
- Greek government bonds were hit as concerns over a new loan package for Greece gained traction. Yields on two-year notes rose to a record 40.47%, while 10-year yields rose to 17.4% earlier today, their highest in a month. Now here is a quick guide to who gets crushed if Greece defaults >
- German business climate index fell to 108.7 in August, down from 112.9 the previous month. Business confidence fell to its lowest in more than a year, as the European debt crisis dragged on the country’s outlook for economic growth.
- BHP Billiton posted a 62% jump in second-half earnings but missed market forecasts. Net profit rose to $10.98 billion for the six months to June, from $6.77 billion a year ago. Dividend of $0.55 per share beat expectations of $0.51 per share.
- It has been reported that Qadaffi has fled Tripoli, as rebels stepped up their attacks on his stronghold. Rebels ransacked his Bab al-Aziziya bastion and seized weapons, but Qaddafi maintained that he would fight to ‘death or victory’. Check out photos from Qaddafi’s 42-year reign >
- July durable goods orders beat expectations rising 4% beating expectations for a 2% rise >
- Toll Brothers Inc. posted a 54% rise in Q3 net income, but revenue fell 13% to $394.3 million missing estimates. The company however narrowed its full-year home delivery outlook attributing the move to unstable market conditions. Don’t Miss: 10 cities where its cheaper to a buy a home than to rent one >
- BONUS – Katie Holmes was spotted leaving dance class in Brentwood, Los Angeles.