Banks have had a nice run this week, time for a pause. But the S&P 500 FINANCIALS INDEX is giving up very little today.
| Value 107.78 | Change -1.29 | % Change -1.2% |
Warren Buffett was paid a modest salary last year, as usual. Of greater interest, Berkshire Hathaway (BRK.A), down 3200 or 4%, lost its AAA credit rating at Fitch Ratings. Other rating agencies are probably not far behind in cutting ratings for Berkshire. Yesterday, General Electric lost AAA rating from S&P. Both reductions are based on worsening conditions in their financial divisions. Not too long ago (say 25 years) about 20% of the companies were rated AAA. I've lost count, but the number has to be under 10 today.
Speaking of AAA credit ratings & downgrades, China, the largest holder of US Treasuries, is getting worried about its US Treasury portfolio & are looking for more assurances. This represents a mild form of credit downgrade which may worsen as US gov deficits balloon on multiple spending packages approved by Congress.
•China's Wen Is `Worried' at Safety of U.S. Treasuries, Asks for Assurances
After a 24 point run-up this week, the Alerian MLP Index is flattish today. REITs & junk bond funds are off slightly. No meaningful changes after they've all enjoyed a very good week. VIX, the volatility index, is inching up.
Oil is up pennies (trying to reach 48) ahead of the OPEC meeting this weekend. Oil traders are guessing whether OPEC will call for more production cuts or maybe tighter enforcement on its members. It's difficult to feel sorry for them, but the $100 price decline from the highs last summer hurt them badly giving incentive to the hungrier ones to pump a little more oil.
The rest of the day should be quiet in the markets with a modest sell-off after this week's large gains.
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