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Money Watch: Weekly Wrap

What an exhausting week! The elections, the Fed's $600B QE2 announcement (video snapshots here and here) and the jobs report in five short days made it the trifecta of news pegs.

Expressed as a formula, the week that was might look like this:

Potential gridlock + easy Fed money + 151,000 new jobs = two-year highs for US stocks

  • DJIA: 11,444, up 2.9% on week, up 9.7% YTD (highest close since September 8, 2008)
  • S&P 500: 1225, up 3.6% on week, up 9.9% YTD (up nearly 7% over the last five weeks)
  • NASDAQ: 2578, up 2.8% on week, up 13.7% YTD (highest close since January 3, 2008)
  • December Crude Oil: $86.85, up 6.6% on week
  • December Gold: $1397.70, up 3% on week (up 26.2% year-to-date)
Total bank failures for 2010 = 143 (4 new failures over weekend, surpassing 140 in 2009)

FACTOIDS OF THE WEEK: DEBT EDITION

  1. The Fed said that revolving debt, (mostly credit-cards) fell by $8.3B or 12.1 percent in September. Credit card debt has been falling for more than a year and the September decrease is the 25th consecutive. The average credit card debt balance as of 8/10 = $5,880, 3.7 percent below the $6,103 average in 8/07 (Experian)
  2. 2011 borrowing: IMF says that the US will need to find about $4.2T to pay off maturing bonds and cover the budget deficit. That's 9 percent more than in 2010 and 28 percent of total projected GDP for 2011
  3. Political battle looming: Current US debt = 13.7T and current debt ceiling=14.3T. Officials say that the US will hit debt ceiling by May 2011, which means that legislative action will be required before that time.

IN THE WEEK AHEAD: Earnings will be back in the news this week as Cisco, Disney, Macy's, Kohl's and J.C. Penney release results. On the economic calendar, the September U.S. trade deficit is expected to widen and the consumer sentiment index is should increase slightly.


Mon 11/8: Tues 11/9: Weds 11/10: 8:30 International Trade
Thurs 11/11: Veteran's Day-stock markets open, bond markets closed
8:30 Weekly Jobless Claims
Fri 11/12: 9:55 Consumer Sentiment