China’s economy grew faster than expected in the fourth quarter, although tighter credit at home and weak export markets still weighed, dragging annual growth in gross domestic product to 8.9 percent in the fourth quarter, its weakest pace in 2-1/2 years.
KEY POINTS
— Q4 GDP grew 8.9 pct yr/yr (f’cast 8.7 pct; Q3 9.1 pct)
— Dec factory output +12.8 yr/yr (f’cast +12.2 pct)
— Dec retail sales +18.1 pct yr/yr (f’cast +17.2 pct)
— Jan-Dec FAI +23.8 pct yr/yr (f’cast +24.1 pct)
The European Financial Stability Facility, the euro area’s bailout fund, lost its top credit rating at Standard & Poor’s after earlier downgrades of France and Austria.
The rating was cut to AA+ from AAA, S&P said yesterday in a statement and removed the facility from CreditWatch with negative implications. S&P had said on Dec. 6 that the loss of an AAA rating by any of EFSF’s guarantors may lead to a downgrade.
“The EFSF’s obligations are no longer fully supported either by guarantees from EFSF members rated AAA by S&P, or by AAA rated securities,” the rating company said. “Credit enhancements sufficient to offset what we view as the reduced creditworthiness of guarantors are currently not in place.”
The EFSF, designed to fund rescue packages for Greece, Ireland and Portugal partially with bond sales, owed its AAA rating to guarantees from its sponsoring nations. Two of those sovereigns, France and Austria, were cut on Jan. 13 to AA+ from AAA by S&P, which also downgraded seven other euro countries.
Klaus Regling, chief executive officer of the facility, said the downgrade won’t hamper its capacity of 440 billion euros ($557 billion). “EFSF has sufficient means to fulfill its commitments under current and potential future adjustment programs until the ESM becomes operational in July 2012,” he said in an e-mail, referring to the permanent European Stability Mechanism.
Economics, FedSpeak and Eurozone Follies:
Monday
US Markets Closed for Martin Luther King Day
Spain Sells Bills
Tuesday
Empire State Manufacturing Survey for January
Wednesday
Portugal Sells Bills
PPI for December
TIC Data for November
Industrial Production and Capacity Utilization for December
NAHB Housing Market Index for January
Thursday
France Sells Bonds and Notes
Spain Sells Bonds
Weekly Jobless Claims
Housing Starts for December
CPI for December
Philly Fed Index for January
Friday
Existing Home Sales for December
Earnings:
Monday
None
Tuesday
Forest Labs
M&T Bank
Linear Technology
Citigroup
Wells Fargo
Wednesday
eBay
PNC Financial
State Steret
Xilinx
Northern Trust
Charles Schwab
US Bancorp
SLM
Bank of New York Mellon
Goldman Sachs
Fastenal
F5 Networks
Thursday
Johnson Controls
Union Pacific
BB&T
BlackRock
Freeport-McMoRan
Huntingon Bancshares
Southwest Airlines
PPG Industries
UnitedHealth
Microsoft
Intuitive Surgical
Intel
IBM
American Express
Bank of America
Morgan Stanley
Rockwell Collins
People’s United
Capital One
Friday
Schlumberger
Comerica
First Horizon National
General Electric
Parker Hannifin
SunTrust Banks
Fifth Third Bancorp