“Stocks take the stairs up and the elevator down.” – unknown

1. Greece reportedly faces IMF aid cut-off — The International Monetary Fund is set to stop aid payments to Greece, raising the odds that the nation will become insolvent as early as September as reported by Der Spiegel.
2. Moody’s Investors Service revising its outlook on Germany — Moody’s Investors Service has lowered its outlook on Germany, Holland, and Luxembourg to Negative, while affirming Finland’s Stable outlook and AAA credit rating. The agency cited the usual fears related to the eurozone’s debt crisis, along with the “increasing likelihood that greater collective support” will be needed for Spain and Italy.
3. Fed mulls more action to spur economy — WSJ reported Federal Reserve officials, impatient with the economy’s sluggish growth and high unemployment, are moving closer to taking new steps to spur activity and hiring. Purchases of mortgage-backed securities, a pledge to keep rates low for longer, or even a move to further push down the nearly microscopic short rates are among the choices available to the FOMC.
4. AAII latest sentiment readings — AAII latest bullish sentiment dropped to below 22; In prior bull market when the bullish sentiment dropped below 25%, the market rally over the next 3-month and 6-month;
5. U.S. growth slows to 1.5% in second quarter — Marketwatched reported The U.S. economy took a turn for the worse in the spring as consumers pared spending and businesses invested at a slower pace, with little sign growth will sharply accelerate anytime soon.
6. President Election Cycle — below is the chart (courtesy of the Bespoke Inv’t Group) which highlights the similarities between this year and prior Presidential Election years numerous times. If the pattern continues, the S&P 500 could be set up for a nice rally to end the Summer.

The week ahead — Economic data from Econoday.com: