Week Aug 26 2011 – Weekly Recap & The Week Ahead
“I measure what’s going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.” — Martin Zweig
1. Merkel again rejects eurobonds– — Angela Merkel reiterated her opposition to eurobonds despite increasing pressure within the EU and among investors, saying they are “not the answer” to solve the eurozone’s debt crisis.
2. Euro Zone Services Growth Eases, Factories Contract — The euro zone’s dominant service sector was effectively stagnant this month after two years of growth while manufacturing activity, which drove a large part of the economic recovery in the bloc, shrank for the first time since September 2009. The PMI for the manufacturing sector slid to 49.7—its first sub-50 reading since September 2009.
3. U.S. May Back Refinance Plan for Mortgages — the White House is reportedly considering a proposal to allow millions of homeowners with government-backed mortgages to refinance their loans at today’s lower interest rates of about 4%. The move could save borrowers an estimated $85B a year and it wouldn’t need congressional approval. However, it could face opposition from regulators and investors in bonds tied to the mortgages.
4. Bullish Sentiment increases for the 3rd straight week — below is the chart courtesy from the Bespoke Investment Group.
5. Greece sets minimum take-up rate for debt swap plan — Greece said last Friday it would not go ahead with a debt swap crucial to its second bailout if private sector holders of less than 90 percent of the bonds participate, failing to satisfy its international partners.
The week ahead — Economic data from Econoday.com:
