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Last Week's Headlines
- Faced with pressure from Greece's eurozone colleagues, Prime Minister George Papandreou resigned. He was replaced by former European Central Bank Vice President Lucas Papademos, who will lead a provisional coalition government in trying to adopt legislation that would meet the conditions needed to receive ongoing financial assistance.
- After the yield on 10-year Italian bonds spiked briefly well above 7%, the Italian Parliament passed austerity measures designed to keep investors from shunning the debt of the region's third-largest economy. As part of the deal, Italian Prime Minister Silvio Berlusconi resigned and former European Union Commissioner Mario Monti was asked to take over and lead a coalition "technocrat" government in implementing the reforms.
- Mortgage foreclosures, which had been delayed last year by processing problems, are on the rise again. The number of foreclosures was up 7% for the month of October; according to RealtyTrac, that's a seven-month high. However, the foreclosure rate was still almost a third less than last year.
- Jefferson County, Alabama, home of the state's capital, filed for bankruptcy that was brought on in part by a corruption-plagued sewer project. The roughly $5 billion at stake makes it the largest municipal bankruptcy in U.S. history, exceeding even the $2 billion owed by Orange County, California, when it collapsed in 1994.
- A $2.5 billion increase in exports helped cut the September U.S. trade deficit to $43.1 billion, according to the Bureau of Economic Analysis.
Eye on the Week Ahead
As new governments in both Italy and Greece attempt to address budget issues, domestic data will focus on manufacturing, inflation, and retail sales. Investors also will be watching the direction of yields at various European bond auctions. And as the congressional supercommittee's November 23 deadline approaches, its progress (or lack thereof) could begin to draw attention.
Key dates and data releases: wholesale inflation, retail sales, business inventories, Empire State manufacturing survey (11/15); Philadelphia Fed manufacturing survey, housing starts (11/17); options expiration, leading economic indicators (11/18).
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