There is little on the economic calendar this week, a situation that usually favors the prevailing wind from the previous week. For once we're comfortable saying that this time could be different, however. To begin with, Monday was a national U.S. holiday and markets were closed. Two days later, Rosh Hashanah begins at sundown on Wednesday, and the period between Rosh Hashanah and Yom Kippur (about 10 days) is historically a time of light volume (as if recent volume hasn't been light enough already). The typical bias is to the downside (whence the old trading proverb, "Sell Rosh Hashanah and buy Yom Kippur").

Then, there's Europe. It's the end of the summer vacation period on the other side of the Atlantic, with half the Continent migrating back north from sunnier climes. It's time to face reality again, and that's going to mean unrest over the current state of affairs. National strikes were scheduled for Tuesday in France (protesting the raising the retirement age to 62) and Wednesday in Greece (over job and wage cuts). Despite the torpor of August, much of Europe seems poised to explode.   More 

In the ongoing battle between the rose-colored glasses camp, who anticipated a near normal recovery, and the doom-and-gloomers, who deny we ever came out of the recession, the optimists managed to tie up the score last week.

The surprise comeback follows a month of data that made it appear the rosy glasses set would go down in certain defeat. Stronger-than-expected payroll data, better manufacturing data out of China and the United States, and better-than-anticipated back-to-school sales helped even the score.   More 

One of the most difficult fences to hop coming out of every recession is the media coverage. Equity markets aren't the only players in the economy that are susceptible to momentum runs. The business and mainstream media get caught in a rut as well. Add in the fact that grim headlines tend to be more of the stock in trade, and you can see why the media tends to remain deeply skeptical long after a recovery has started.

Journalists have some good reasons for their skepticism, too. The excesses that lead to recessions are always orphans whose parentage is suspected everywhere and admitted nowhere, or at least not publicly. The last two recessions came along with crashes that were painful and destructive, and naturally the average person would like to know whose fault it was (surely not our own).    More 

The economic news this week was pretty bleak. Apparently, a lot of that was already baked in, as the market declined a modest 0.6% overall. Existing home sales, new home sales and durable goods orders were weak and below expectations. Intel INTC also warned that weak consumer spending would hurt September quarter sales, but business spending remained robust.

The GDP report for the June quarter was revised down from 2.4% to 1.6%, slightly better than expected. While still elevated, initial unemployment claims were far better than expected, falling by 31,000 people. On Friday, Federal Reserve chairman Bernanke's pledge to do whatever it takes to save us from deflation was met with applause on Wall Street, igniting a small rally. Consumer loan delinquencies also managed to eke out a small improvement this month, building a small but nevertheless positive trend.   More 

Recent economic data are best characterized as mixed, and the S&P 500 index has reacted accordingly, falling 0.7% last week. There's no denying that there is a lot of bad news, including poor initial unemployment claims data, housing data that continued to bump along the bottom, and some worrying signs out of a slowing manufacturing sector.

But there is good news, too. Industrial production jumped over a percent, corporate spending and merger activity continued to accelerate, and banks appear to be slowly opening their purse strings according to a recent Federal Reserve report. Low rates and increased mortgage refinancings should also bode well for consumers.

The positive data, however, were largely ignored.   More