Last week proved to be another volatile and emotionally driven one, as stocks continued to show signs of increased volatility. The latest worry was the country of Italy and its possibility of defaulting on its debt. The story in Italy is basically the same as the story in Greece, except that it’s much larger which means that it’s potentially far worse. Italy is the third-largest economy in Europe and it now holds some $2.6 trillion in debt. That’s more than Greece, Ireland, Spain and Portugal combined. It that figure ever did default, investors would certainly take notice. Last Wednesday was the low light, as the Standard & Poor’s 500 got hit for a 3.67% loss over fears that Italy wouldn’t be able to pay its debt. However, the markets righted themselves on the last two trading days of the week, and the major domestic indexes ended the trading week somewhat mixed. Either way, given all the turmoil swirling around the globe, the results of last week would have to be considered a ‘moral’ victory to say the least.
With respect to earnings reports this week, many of the major retailers will be reporting, including: Urban Outfitters, Lowe’s, Limited Brands, J.C. Penney, Home Depot, Wal-Mart Stores, Staples, Dicks Sporting Goods, Target, Abercrombie & Fitch, Dollar Tree, Gap, Foot Locker and Sears Holdings. Hopefully we’ll see continued improvement with these results as we head into the all-important holiday shopping season.
This week also brings a boatload of wide-ranging economic news. The highlight of the week will more than likely be the retail sales figures, which come out on Tuesday. Posting on the same day are producer prices and the Empire State manufacturing tally. At mid-week, traders get to parse the October consumer price index and industrial production. Thursday is highlighted by housing starts along with the Philadelphia Fed manufacturing results.
As we enter the third week of November, the increased volatility which we’ve been dealing with for some time now will more than likely continue. However, despite the volatility in the financial markets, the real economy appears to be making some progress with an improving (albeit slow) recovery. The export sector is still an engine of growth and the consumer sector is beginning to show some signs of increased confidence. In addition, we are in the heart of the bullish time of year (historically) for stocks, so maybe that means we’ll see a strong finish to what has been a wild and rough year for the overall equity markets. Until next week, take care!!
Sources:Barron’s, Wall Street Journal, Associated Press, Econoday, Bloomberg, Dow Jones & Company, Briefing.com
Audrea attended the University of Alabama in Tuscaloosa, where she majored in one of the first approved financial planning programs taught at the University level. In 1998 Audrea graduated from The University of Alabama in Tuscaloosa with a Bachelor of Science degree in Family Consumer Sciences & Financial Planning. Audrea has over 19 years of experience as a Financial Advisor with Money Management Services. She holds the designations of AIF® (Accredited Investment Fiduciary), CRPS (Chartered Retirement Plan Specialist) & CES™ (Certified Estate and Trust Specialist). As an advisor, Audrea specialized in comprehensive financial planning, estate tax planning, personal taxation planning, retirement income distribution planning, wealth accumulation, personalized portfolio management, and fiduciary investment management services.