“After all these years, I know one thing for certain: the PERFECT trading system does not exist and never will” — Jake Berstein

1. Treasury Secretary to avoid Detroit bailout — ABCNews, Treasury Secretary Jacob Lew appears to have dismissed union calls to provide bankrupt Detroit with financial assistance. “Detroit’s economic problems have been a long time in developing,” he said. “I think Detroit’s going to have to work with its creditors on this.” In the Senate, Texas’ John Cornyn has filed an amendment that would ban the federal government from bailing out financially troubled cities, while Lindsey Graham is also opposed to such rescues.
2. Japanese industrial output drops in June — Japanese industrial production unexpectedly dipped in June by 3.3% on month, trailing expectations for a 1.7% drop. A decline in the production of transport equipment, including autos, led the fall, followed by electronics and machinery.
3. China’s official Purchasing Managers’ Index (PMI) for July 2013 shows gain — MarketWatch, China’s official(PMI), registered a surprise gain for July, rising to 50.3 from 50.1 the previous month. However, a separate PMI published by HSBC and Markit said activity was contracting, with the index sinking to an 11-month low of 47.7, down from June’s final reading of 48.2. Any reading above 50 indicates activity is expanding, and the result beat expectations for a drop to 49.8, according to estimates reported by Dow Jones Newswires.
4. Fed downgrades economic view — FederalReserve, The FOMC slightly downgraded its view of the U.S. economy. The Fed stated the US economy expanding at a “modest” pace vs. “moderate” at the last meeting. However, the Fed didn’t provide any hint about any alteration to the future course of QE.
5. Eurozone economy stabilizes as German recovery accelerates and downturns ease in France, Italy and Spain — Markiteconomics, Eurozone business activity expanded for the first time in 18 months in July as composite PMI increased to 50.5 from 48.7 in June, while services PMI rose to 49.8 from 48.3. Germany’s recovery gained momentum and the downturns in major economies such as France, Italy and Spain eased further.
6. Bullish Sentiment Drops For 3rd Straight Week — courtesy of BIG, as market makes new highs, individual investors actually turned moderately more cautious in the latest week According to the weekly survey from the American Association of Individual Investors (AAII).

The week ahead — Economic data from Econoday.com: