Succinct summation of week’s events:
1) ECB to the rescue, Italian and Spanish yields fall 100bps+
2) Initial Jobless Claims fall below 400K after 16 weeks above, 4 week avg drops to lowest since mid Apr
3) July Retail Sales better than expected and June revised up
4) Refi apps rise 30.4% to most since Nov as 30 yr mortgage rate goes to avg of 4.37%
5) For asset prices at least, Bernanke put last summer was at 1050 in S&P’s, now its 1120, S&P’s down less than 2% on week.
1) US embarrassingly loses AAA rating (last Friday night)
2) Bernanke adds another step to his central planning, ‘do nothing’ is not in his vocabulary, with the deeper he gets how the heck does he think he’s going to reverse this smoothly?
3) Health of European banking system called into question, access to funding a real risk, excessive leverage and sovereign holdings to blame, euro basis swap spikes to most since Dec ’08
4) UoM confidence falls to 31 yr low spurred by events of last 2 weeks
5) US Trade Deficit $5b higher than expected as exports fall, may trim Q2 GDP by up to .4 of % pt
6) NFIB small biz index falls to lowest since Sept
7) Business Inventories rise only .3%, GDP drag but co’s lean
8) Q2 GDP in France flat q/o/q, Hong Kong GDP down .5% q/o/q, Greece GDP lower by 6.8% y/o/y
9) China CPI up 6.5% and bank loans, IP, retail sales, M2 all rise below estimates.