Week Dec 9 2011 – Weekly Recap & The Week Ahead
“Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it. “Warren Buffett
1. Italian PM unveil €30B austerity package — Mario Monti unveiled a €30B ($40.3B) austerity package of tax hikes and spending cuts. The measures also contain steps to fight tax evasion, including a ban on cash transactions of above €1,000. The hope is that the reforms will create a balanced budget in 2013. Italian bond yields have fallen sharply to 6.16% after package was proposed.
2. S&P 500 High-Yielders — courtesy from the Bespoke Investment Group, below is a list of the 39 S&P 500 stocks that currently yield more than 4% and are also down less than 10% year to date.
3. S&P Warns on 15 EU Nations — Standard & Poor’s issued a negative outlook on 15 EU countries, including AAA rated German and France citing market stress and rising risks of a blocwide recession.
4. Jeremy Grantham Chief Investment Strategist of GMO Investment shares his outlooks in his latest quarterly letter.
5. ECB cuts key rate to 1% — The European Central Bank cut its key lending rate, as expected, by a quarter point to 1% in the face of a looming recession, while investors awaited word from Mario Draghi on other measures aimed at addressing the euro zone’s sovereign debt crisis.
6. S&P may downgrade E.U.’s triple-A rating — Standard & Poor’s Ratings placed the European Union’s triple-A rating on CreditWatch with negative implications, a sign that the rating could be downgraded soon.
7. EU group agrees on fiscal pact without U.K — according to the Telegraph, 23 EU nations agreed to tighten their fiscal coordination, with EU countries also agreeing that central banks would loan the IMF €200B ($267B) to lend to distressed members. However, the U.K. wielded its veto to prevent a new treaty after not receiving protection for its financial sector, and warned that the new bloc would not be able to use EU resources.
The week ahead — Economic data from Econoday.com:
