Happy Veteran’s Day and Happy 11-11-11! What a crazy week it has been in the stock market. With all of the volatility this week, the market still managed to squeeze out a 1% gain. This mainly happened at the end of the week after a little more resolution occurred in Europe.
So What Drove The Market This Week?
- Europe, Europe, and Europe: Europe was the biggest driver of the market all week. Just when finance ministers thought they had the debt crisis contained to Greece, Italy started showing weakness to start the week. As a result, it sent the markets down big-time. Italy, being the world’s 8th largest economy, and having trillions in debt outstanding, would be impossible to bail out like European leaders have done with Greece. As a result, this “too big to fail” country could cause a global financial crisis should it default on its debt. However, by the end of the week, Italy had passed reformed that swayed the market in a much more positive direction.
The College Investor’s Thoughts
- Financials: Until everything is resolved in Europe, stay out of banking and finance stocks. These stocks have been the most volatile over the past few weeks, and that should continue until solid results are achieved in Europe, and de-leveraging in the US is completed. I think these stocks will under-perform the broader market while these issues remain.
That’s all I have for this week! Readers, what are your thoughts?
|
Share the Love
|
Get Free Updates
|
This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
{ 3 comments… read them below or add one }
Actually, Greece is a “too small to fail” nation. It’s not that we’re worried about Greece. We’re worried that once Greece defaults, all the other PIGS will follow.
Greece is too small, but it is Italy that is too big to fail. That is the real issue.
Lately, the only factor that seems to drive markets is Europe. Everyone is looking at what’s going on there and freaks out on a regualr basis. I do the same!