Week Aug 31 2012 – Weekly Recap & The Week Ahead
“The facts are unimportant! It’s what they are perceived to be that determines the course of events” — R. Earl Hadaly
1. Spain will probably need €60B of bailout according to Economy Minister — Spain expected to use approximately €60B of the €100B available for its bank rescue, Economy Minister Luis de Guindos has told the NYTimes.
2. Election Years chart pattern — the S&P500 (SPX) continues to track the typical election year chart pattern, courtesy of the Bespoke Investment Group. If the correlation continues to hold, the equity markets should track higher into the beginning of September before a pre-election correction.
3. Borrowing costs drop as Spain sells 3- and 6-month debt — Spain saw borrowing costs collapse at an auction of three- and six-month government bonds, amid growing expectations the European Central Bank will implement policy measures to help stabilize the euro zone’s sovereign debt markets at its next policy meeting in early September.
4. Hurricane Isaac Hits Louisiana — Hurricane Isaac arrived in New Orleans seven years to the day that Katrina struck, although Isaac is less powerful. Still, hundreds of thousands have been left without power, while nearly all oil output and two-thirds of gas production in the Gulf of Mexico have been shut down.
5. Catalonia Seeks Spain Rescue — the semi-autonomous NE region, which accounts for about 1/5th of national GDP, said it needs 5 bil euro. Catalomia is the 2nd province to ask for a Madrid bailout as Spain mulls requesting a national sovereign bailout.
6. Bundesbank chief considered resigning — Germany’s Bild reported Bundesbank President Jens Weidmann has thought about resigning in recent weeks, due to his opposition to Mario Draghi’s plans for the ECB to resume the buying of eurozone government debt.
7. Bernanke Speech at Jackson Hole — In a speech at the Fed’s Jackson Hole retreat last Friday, Bernanke did not pre-commit to taking action. However, he did reinforce the case for more asset purchases.
The week ahead — Economic data from Econoday.com:
