“In investing, the return you want should depend on whether you want to eat well or sleep well” — J Kenfield Morley

1. Moody’s downgrades Portugal on bailout fears — Moody’s cut Portugal’s rating by one notch to Baa1 from A3 and put the rating on review for a possible further cut. The move comes after Moody’s cut Portugal’s rating by two notches last month.
2. China Raises Interest Rates to Counter Inflation Pressure — China raised interest rates for the fourth time since the end of the global financial crisis to restrain inflation and limit the risk of asset bubbles in the fastest-growing major economy. The benchmark one-year lending rate will increase to 6.31 percent from 6.06 percent
3. European Central Bank hikes rates — The European Central Bank delivered its first rate hike to 1.25% from 1% since 2008 despite the euro zone’s newest debt woes in a bid to prevent rising inflation pressures from becoming entrenched.
4. Portugal seeks bailout, Europe debt crisis spreads — Portugal asked for a bailout to relieve its crushing debt, joining Greece and Ireland by becoming the third eurozone nation to seek outside help amid a bruising financial crisis.
5. Market Breadth Indicator shows short-term overbought — The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

6. Investor Fear Gauge — The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge”. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.

The week ahead — Economic data from Econoday.com: