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Money Watch Weekly Wrap

Not since the passage of TARP have lawmakers gone down to the wire on an important vote. With only 6 months remaining in fiscal 2011, the US finally has a budget - one that cuts an estimated $38 billion in spending. There will be a stopgap measure to allow the deal to be put in legislative form. The week on Wall Street was dominated by analysts trying to predict the economic impact of a shutdown-with few investors willing to make a bet either way and stocks trading in a narrow range.
  • DJIA: 12,380, up 0.03% on week, up 6.9% YTD (up 4.4% in three weeks)
  • S&P 500: 1328, down 0.3% on week, up 5.6% YTD
  • NASDAQ: 2780, down 0.3% on week, up 4.8% YTD
  • May Crude Oil: $112.79, up 4.5% on week (up 11.60%, over the last three weeks)
  • April Gold: $1473.40, up 3.1% on week
  • AAA National Average Price for Gallon of Regular Gas: $3.75 (Record was $4.11 in July, 2008)
Total bank failures for 2011 = 28 (2 new bank failures over weekend)

FACTOIDS OF THE WEEK:

  • Bull/Bear Warning? The spread between stock market optimists (bulls) and pessimists (bears) is the highest since October 2007, when indexes were at their all-time highs. The American Association of Individual Investors' survey shows that 43.6% of its members were bulls, 28.8% bears and 27.6% neutral, with many of the bears throwing in the towel recently. Often when the spread widens, it can be a contra-indicator, meaning that when everyone is feeling good, it can lead to complacency and a nasty market correction.
  • Profits at S&P 500 companies were up 40% last year, as companies slashed spending
  • Analysts expect profits to rise 15% in 2011 on the back of increased sales growth
IN THE WEEK AHEAD: Now that a government shutdown has been averted, investors will turn to corporate earnings and economic data in the week ahead. Banking results start trickling in this week, as J.P. Morgan Chase (Weds) and Bank of America (Fri) report. Analysts expect lower revenue from year-ago levels. On the economic calendar, inflation data, in the form of PPI and CPI will be released. Both indexes likely grew last month on higher energy and food prices.

Mon 4/11:

Tues 4/12:
8:30 International Trade

8:30 Import and Export Prices

Weds 4/13:
8:30 Retail Sales

2:00 Fed Beige Book

Thurs 4/14:
8:30 Weekly Claims

8:30 PPI

Fri 4/15:
8:30 CPI

8:30 Empire State Manufacturing

9:15 Industrial Production

9:55 Consumer Sentiment