Weekly Wrap: Bernanke and QE3

A year ago, when Fed Chairman Ben Bernanke spoke at the Kansas City Fed conference in Jackson Hole, he hinted about QE2, or the Fed's $600 billion bond-buying plan. The mere mention of Fed intervention sparked a big rally for stocks over the ensuing months. Bruised investors are wondering whether Uncle Ben has any similar tricks up his sleeve this year, after capping off a brutal 4-week period in the stock market.

Let's review what happened last week to spur the renewed selling: nothing. There was no new evidence of growth to assuage fears of another recession, nor was there a plan to address how to prevent the spread of the European debt contagion to Italy and Spain. In the absence of good news, investors sold and stocks closed out the worst 4-week period since March 2009, when the market plunged 16 percent to the bear market low.

• DJIA: 10,817, down 4% on week, down 6.5% YTD (down 14.7% in past 4 weeks)
• S&P 500: 1123, down 4.7% on week, down 10.6% YTD (down 17.6% from 2011 high)
• NASDAQ: 2341, down 6.6% on week, down 11.7% YTD
• September Crude Oil: $82.26, down 3.8% on week
• December Gold: $1852.20, up 5.6% on the week (up 30% year-to-date)

Total bank failures for 2011 = 68 (4 new bank failures over weekend)

FACTOIDS OF THE WEEK: The R Word: Are We Headed for Another Recession?

• Recession defined, rule of thumb: two consecutive quarters of contraction in GDP
• Recession defined (official): National Bureau of Economic Research (NBER) says the economy is experiencing "a significant decline in activity."
• NBER said recent recession began in December 2007 and ended in June 2009 (18 mos)
• Previous 3 recessions: 3/01-11/01 (8 months), 7/90-3/91 (8 months), 7/81-11/82 (16 mos)

Mon 8/22:
8:30 Chicago Fed Nat'l Activity Index

Tues 8/23:
8:30 New Home Sales

8:30 Richmond Fed Business Activity Survey

Weds 8/24:
8:30 Durable Goods Orders

Thurs 8/25:
8:30 Weekly Claims

10:00 Existing Home Sales

8:30 Kansas City Fed Manufacturing

Fri 8/26:
8:30 Q2 GDP (2^nd estimate-1^st estimate was +1.3%)

8:30 Corporate Profits

9:55 Consumer Sentiment

Bernanke speaks to the Kansas City Fed conference in Jackson Hole

Jill Schlesinger

Jill Schlesinger, CFP® is the Emmy-nominated business analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and chief investment officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.

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