Stocks gain as the stock market managed to rack up a second consecutive week of gains even as the euro zone’s latest band aid to fix its debt crisis was met with timid responses. Hopes were high for another one of those last-minute, big-deal breakthroughs that would ultimately save the day for the European union, and by the looks of the week’s rally Wall Street, you would have thought that was exactly what happened. The problem, however, was that the EU Summit did not quite live up to its task of saving the day for the EU. Britain’s Prime Minister David Cameron decided to snub the broader EU bailout vote, and has now left many investors wondering if the EU and the euro might quickly split apart or meltdown. Nevertheless, stocks still managed to move higher even with some disappointing forecasts from big U.S. Companies.
This week’s economic calendar is particularly heavy with both inflation and manufacturing data on tap. The highlights are on Tuesday with an update on consumer spending with retail sales, and then later in the afternoon with the Federal Reserve’s Federal Open Market Committee meeting statement. No policy changes are expected with respect to the Fed, but Fed watchers think that the panel could make a move toward greater transparency by discussing its guidance about future policy. On the inflation front, import prices post on Wednesday, the producer price index on Thursday, and the consumer price index on Friday. In addition we have manufacturing updates on Thursday for the Empire State, Philly Fed and industrial production.
With more haggling as to the euro zone debt issues likely to consume the news headlines, there’s no doubt that the markets will continue to be volatile as we move into the holiday season. So keep your seat-belts fastened, and until next week, take care!!
Sources:Barron’s, Wall Street Journal, Assoc. Press, Econoday, Bloomberg, Dow Jones & Co., Briefing.com, Gorilla Trading