Week Oct 7 2011 – Weekly Recap & The Week Ahead
“A speculator is a man who observes the future, and acts before it occurs”. Bernard Baruch
1. Greece will miss deficit targets — the Greek cabinet approved the draft 2012 budget and will present it to parliament; However, but while the government agreed to an additional €6.6B ($8.8B) of austerity measures demanded by the troika, the country won’t meet its deficit target this year. Greece’s 2011 deficit is now expected to be 8.5% of GDP vs. its 7.6% target; for 2012, the deficit is set to fall to 6.8%, still above the 6.5% target.
2. China says U.S. yuan bill may spark trade war — China criticized a U.S. Senate decision to move ahead with a bill designed to pressure Beijing on its currency policy, saying the move fosters distrust and could spark a trade war.
3. Moody’s Downgrades Italy — the ratings agency cut Italy’s sovereign debt by 3 notches to A2 with a negative outlook.
4. Q3 key ETFs performance — below is the table depicting 3Q 2011 performance of selected ETFs courtesy of the Bespoke Investment Group.
5. EU’s President wants coordinated bank recapitalization — the European Union’s executive proposed coordinated recapitalization of banks as the bloc’s regulators met to review capital buffers of stressed lenders.
6. AAII Bullish Sentiment Rises 
7. Fitch downgrades Italian, Spanish debt ratings — The Fitch agency downgraded its sovereign credit rating for Italy and Spain on Friday and said its long-term outlook for both countries was negative, citing high debt and poor prospects for growth.
Separately, Fitch also said it was keeping Portugal’s debt rating on watch for a possible downgrade, with a decision due by the end of the year.
The week ahead — Economic data from Econoday.com:
