Money Watch Weekly Wrap
Forward momentum on debt deals in Europe and the US, along with strong corporate earnings, spurred stock buying across the globe.
Euro-zone leaders agreed on a new €109 billion Euro ($157B) bailout for Greece to stabilize the nation's finances and to prevent a spread of the contagion across the Continent. Leaders of the euro zone further committed to maintaining financial support for Greece, Ireland and Portugal; until those countries are strong enough to borrow money in the public markets.
In the US, while no debt ceiling agreement was reached, President Obama and House Speaker John Boehner continued to negotiate a larger $3+ trillion dollar deal that would make large spending cuts and reform the tax code over the next decade. However, after the close on Friday, the parties had broken off talks for a "Grand Bargain".
And about those robust corporate earnings...strong results are certainly good for the stock market, which is steadily marching towards its all-time high, last seen in October, 2007, but that doesn't really help average Americans' lives. Check out this post for more details: Earnings UP, Americans are DOWN.
- DJIA: 12,681, up 1.6% on week, up 9.5% YTD
- S&P 500: 1345, up 2.2% on week, up 6.9% YTD
- NASDAQ: 2858, up 2.4% on week, up 7.7% YTD
- September Crude Oil: $99.87, up 2.3% on week (up 9.5% over last 4 weeks)
- August Gold: $1601.50, up 0.7% on the week (up over 8% over last 3 weeks)
Total bank failures for 2011 = 58 (3 new bank failures over weekend)
FACTOIDS OF THE WEEK: Top Ten Deductions and cost for 2010-2014 (source: WSJ)
Any of these items could be on the table for any large debt-reduction plan:
- Health Insurance = $659B
- Mortgage Interest = $484B (34 million tax returns/year claim)
- Capital Gains and Dividends = $403B
- Pensions = $303
- Earned-Income Tax Credit = $269B (26 million tax returns/year claim)
- Donations = $241B (36 million tax returns/year claim)
- State Taxes = $237B (41 million tax returns/year claim)
- 401 (k) = $212B
- Capital Gains at Death = $194B (assets get "step-up" at death)
- Social Security benefits = $173B (28 million tax returns/year claim)
IN THE WEEK AHEAD: Investors will focus on Washington, as the August 2nd debt ceiling deadline rapidly approaches. Earnings season will continue, amid a number of economic reports. More data on homes will likely confirm a market stuck in neutral; durable goods should ease from the prior month; and the initial estimate for second-quarter growth is expected to fall in the 1.5-2 percent range.
Mon 7/25:
Netflix and Texas Instruments
10:00 Housing Market Index
Tues 7/26:
3M, Amazon, U.S. Steel, Ford, UPS
9:00 Case-Shiller HPI
10:00 Consumer Confidence
10:00 New Homes Sales
Weds 7/27:
Visa, Aetna, Boeing
8:30 Durable Goods Orders
2:00 Fed Beige Book
Thurs 7/28:
Bristol-Myers Squibb, Colgate Palmolive, ADP, ExxonMobil, Met Life, Starbucks, DuPont,
8:30 Weekly Claims
10:00 Pending Home Sales Index
Fri 7/29:
Chevron, Amgen, Merck
8:30 GDP
9:45 Chicago PMI
9:55 Consumer Sentiment
