Fri July 30 2010 – Weekly Recap & The Week Ahead
To succeed in the markets, it is essential to make your own decisions. Numerous traders cited listening to others as their worst blunder. — Jack Schwager
As noted in the previous week, the major indexes encountered resistance at the 200-SMA (S&P500 between 1,060 and 1,100).
1. California faced a $19.1 billion state deficit and with no budget in place — Gov. Arnold Schwarzenegger reinstated furloughs for state workers in an executive order declaring a fiscal emergency Wednesday
2. Moody’s warns U.S. needs debt plan to maintain its triple-A credit rating — The U.S. government needs to lay out a credible plan to address its rising debt.
3. Beige Book shows economic fragility — U.S. economic activity continued to be “weak” in June and into July, the Federal Reserve said in its Beige Book report.
4. GDP 2Q slows to 2.4% — below the average 4.4% increase over the last six months.
5. U.S. consumer sentiment fell to 67.8 in late July from 76 in late June.
6. European Banks Stress Test — only 7 out of 91 banks needed to raise a total of €3.5 billion in additional capital; As a sign of easing risk concerns, the Markit iTraxx Senior Financials Index, which measures the cost of insuring debt issued by 25 European financial firms against default, has narrowed. The index was at 118 basis points Friday, according to Markit, down from 131 basis points at the end of last week
AAII and Investor’s Intelligence — Bullish sentiment is slowly making a comeback
The week ahead — earnings season continue:
1. 8/2 — Construction Spending; ISM Manuf Index
2. 8/3 — Factory Orders
3. 8/5 — Export Sales
4. 8/6 — Consumer Installment Credit