Welcome to another edition of Weekend Reading. First, a look back at the week that just finished, then a look forward to the week ahead, and finally, a summary of articles and papers worth reading.
The markets were (mostly) higher last week. The
Nasdaq Composite and the
S&P 500 ended the week up 1.6% and 0.25%, respectively, while the
Dow lost 0.6%. For those you fond of such things, this was the fifth week in a row with the Nasdaq higher. The index has seen a number of five-week streaks in the past couple of years, but you have to back to late 2005 to find a longer one.
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It was the usual stuff, albeit working in reverse, that moved the market last week. We had lower oil prices and a higher dollar, plus no big surprises on the banking and finance front, and that was all that was needed to keep things heading higher. Oil has now been down four weeks in a row, and the dollar has beenstrong for most of the same period.
Looking forward to next week, the song is the same: Lower oil prices and a higher dollar -- and no bank surprises -- will keep markets reasonably strong, but any surprises in any of the above will take things down. The main sources of oil risk are a rethinking of Russian aggressiveness in its region and the possibility that a strengthening Tropical Storm Fay wanders west in the Gulf of Mexico and shuts down more oil platforms. Most current models have Fay staying at Category 1 status, or lower, so worries remain low.
Turning to economic indicators, the government plans to release the July producer price index on Tuesday; it likely will show that inflation was higher than expected. We also will get housing starts on Tuesday and the Philadelphia
Fed's survey on Thursday. Oil, however, will remain the main topic of conversation.
As for earnings, we have a spate of retailers reporting,including
Target (GOOG),
Home Depot (HD) and
Lowe's (LOW). A number of other retailers reported last week, of course, most of which put up decent numbers but then warned about a weakening outlook. Also reporting next week is
Hewlett-Packard (HPQ).
Finally, here are some articles and papers worth reading:
Editor's note: To access some of these stories,registration or a subscription may be required. Pleasecheck the individual links for the site's policy.- It's too soon to toast the end of the subprime crisis. (Bloomberg)
- Barron's pans Freddie Mac/Fannie Mae and interviews theuber-bearish Eric Sprott. (Barron's)
- Inflation even hitting dirt-cheap things, like dirt. (The Washington Post)
- Inflation is bad for stocks, or good, or something. (The New York Times)
- Amusing profile of "Dr. Doom," the indefatigablybearish Nouriel Roubini. (The New York Times)
- Super EIA analysis of recessions, gas prices and declining oil demand. (EIA)
- Zimbabwe copes with an inflation rate of 2,000,000%. (Fortune)
- Lehman in talks to sell real estate, securities. (Reuters)
- Morgan Stanley sees more finance crisis pain. (Reuters)
- Shine off India's economy as gloomy data piles up. (AP)
- Option ARMs remain the ticking time bomb in U.S. housing. (The Economist)
- Moscow's latest actions transform geopolitical risk. (Globe and Mail)
- Mortgage prepayments are beginning to pick up. (The Washington Post)
- Crises and Sudden Stops: Evidence from International Bond andSyndicated-Loan Markets. (NBER)
- We're not yet in a recession, and may never get there. (NBER)
- Book of the Week: Once in a Goldconda -- A True Drama of Wall Street. (Traders' Library)
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