I had a big week this past week. I visited four cities in Spain, traveling over 2,000 kilometers to do so. In miles, that is about 1200, roughly the distance from New York to Florida in the USA. All the cities, Madrid, Salamanca, Avila, and Toledo had something different to offer and all afforded the opportunity to expand my understanding of Spanish culture, both new and old. It is the “old” part I find fascinating, as here in America, our oldest culture is the Native American, and as far as advanced structure and recorded material, very little remains of the great cultures present 500-1,000 years ago. Not so, here in Spain …
This week coming up here promises fodder for market activity, and we don’t have to travel anywhere to experience it. It will come straight at us.
- Consumer sentiment data will come out on Friday.
My guess is the consumer is feeling better about the economy, and if I am correct, this will add momentum to an economy that seems to be chugging forward. It might not be enough yet to get big money back into the equities market, but it could get them thinking if they don’t move money soon, they will be chasing the market, and that is never a solid position.
- February retail sales, due on Tuesday morning, will be among the most-watched reports in the week ahead.
This goes hand in hand with consumer sentiment. If both come in strong, big money might see this a point to start easing into the equities market.
- The Producer Price Index and the Consumer Price Index data is coming out.
Oil, prices are the words on everyone’s lips as it pertains to inflation. Oil prices have once again jumped above $100 and remained there. Both WTI and Brent are showing no signs of easing, even though there is now talk of over-supply and decreasing demand in the market. If the numbers come out suggesting inflation is on the rise substantially, speculation will start flying about what the Fed might do to contain this ever-present threat. Keep in mind, the Fed’s real concern about inflation is not oil and food prices rising as much as it wages rising. Put them both together (wages are rising according to the latest government report), and the Fed sees that as a big problem. Add this all together and a long-term U.S. bond-market shakeup is a real potential. How does an investor sit on a minimal ROI that is less than the current inflation rate and how does an investor stay the course if inflation is beginning to rise quickly. Furthermore, what does the picture look like if the Fed opens the door to raising rates, even though they have suggested that will not happen for some time?
- Greece hopes to get 1 billion euros ($1.31 billion) in financing from the European Investment Bank (EIB) this year as a stimulus for its ailing economy.
We might hear something about this in the coming week or so, and it might prove pivotal in the perception of Greece as the perpetual “hole in the bucket” for the EU. The problem is that many European investors see Greece ultimately falling apart economically and leaving the EU. Even though it seems counterintuitive for Greece to borrow more money, it has to get its economy going, and this is one way to jump start it. Investors will see this as a positive step forward.
Trade in the day – Invest in your life …
