Week Dec 3 2010 – Weekly Recap & The Week Ahead
“There are two kinds of people who lose money: those who know nothing and those who know everything” — Henry Kaufman
1. Europe OKs $112.53 billion Ireland bailout — European financial leaders on Sunday approved an 85-billion-euro, or $112.53 billion, aid package for debt-crisis-stricken Ireland.
2. Euro Crisis Spreads To Spain, Portugal, Italy As Yields Swell — The euro zone’s debt crisis worsened Tuesday, as yield spreads for Portugal, Spain, Italy and even Belgium widened amid mounting fears of defaults or even a breakup of the single-currency area. The euro hit a 10-week low, falling 1.43 cents to $1.2978. It tumbled nearly 10 cents in November. Shares of European banks, the biggest holders of euro zone debt, continued to sell off.
3. ECB extends liquidity, bond buys ‘ongoing’ — The European Central Bank will continue to provide as much short-term liquidity as euro-zone banks demand through at least the first quarter of next year, but ECB President Jean-Claude Trichet offered no hint Thursday on the size of additional purchases of troubled European sovereign bonds.
4. China Announces Shift to ‘Prudent’ Monetary Policy — China will switch to a prudent monetary policy from a moderately loose stance, the Communist Party’s top leaders decided on Friday, a change that could pave the way for more interest rate increases and lending controls, the state Xinhua news agency reported on Friday.
5. White House Offers $150 Billion Deal To Extend Tax Cuts — The White House has signaled its price for yielding to GOP demands to extend upper-income tax cuts: $150 billion to pay for a year of emergency jobless benefits and a batch of expiring tax credits.
6. Bullish Sentiment Rises, Still Below 50% — The latest poll from the American Association of Individual Investors (AAII) was released this morning and showed that bullish sentiment increased modestly to 49.66% from 47.4% last week. While a bullish sentiment level of 49.66% is on the high side, it’s still well off the multi-year high we saw in early November when the S&P 500 was trading at bull market highs.
The week ahead — Economic data from Econoday.com:
