Market Commentary
Over the weekend, the G7 pledged to continue coordinated stimulus, stating, “The position for most countries is to support the economies now and get the budget deficit down as the economy recovers.” In effect, the G7 is performing the high wire act, trying to balance between debt crisis on one side and a double-dip recession on the other. Managing the right fiscal/monetary balance will undoubtedly be quite challenging in the months ahead.

The economic calendar is quiet to start the week. The key economic data on tap will be the release of January Retail sales on Thursday. The consensus is expecting a modest increase of 0.3% in the headline number. Retail sales ex-autos are expected to increase to 0.5%. Also of keen interest to the markets will be Bernanke’s discussion on the Fed’s withdrawal plans with the House panel on Wednesday. Finally, supply returns this week as the Treasury will auction $81 billion in 3-year, 10-year and 30-year securities.

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To our Customers and Clients:

It is amazing that it has been 10 years since we all worried about the potential catastrophic impact of Y2K. While we opened the last decade with little effect from an anticipated event that had everybody’s focus, we certainly closed it with an unexpected and devastating event.