After a stellar week for Wall Street, investors this week face a barrage of economic data, testimony from Fed Chairman Ben Bernanke and a worrisome war of words with Iran.
Oil Check
Oil prices are likely to continue to climb after rising Friday on Iran's detention of 15 British sailors. The markets, and certainly the world, watches what has become an escalating shouting match between Britain and Iran over where exactly the sailors were and what they were doing.
Perhaps not such a coincidence, this weekend the United Nations unanimously voted to level sanctions against Iran for its nuclear program. Iran retaliated by declaring it would limit its cooperation with the International Atomic Energy Agency, the U.N.'s nuclear watchdog. The Iranian president also called the resolution "illegal" and said it would not stop its nuclear efforts.
Oil rose 4.5% last week to $62.28 per barrel, its highest close for the front month contract since Dec. 22. RBOB gasoline last week gained 4.8% to $1.9983 per gallon.
The Week That Was
It's been a long time, four years to be exact, since the Dow and S&P scored as many points in one week as they did last week. The S&P climbed 49 points, or 3.5%, its biggest weekly percent and point gain since March 21, 2003. The Dow Industrials jumped 370, or 3.1%, its best point gain since March, 2003 and its best percent gain in four months. Nasdaq was up 83 or 3.5%, its best performance since August.
"Bernanke continued to affirm his role as optimist," says our Dylan Ratigan, of the rally that took hold with the Fed's modified statement last week. "He continues to believe that inflation will cure itself."
For this week, Ratigan says, "The question is whether when Bernanke speaks Wednesday he'll spark another rally, keeping his streak of pushing the markets higher alive." Bernanke's testimony on the economic outlook this week is before the Joint Economic Committee.
Bernanke also speaks Friday before the Federal Reserve Division of Consumer and Community Affairs conference, "Financing Community Development: Learning from the Past, Looking to the Future."
Other Fed speakers include Fed Vice Chairman Donald Kohn, who testifies Thursday to the House Financial Services Committee on industrial loan companies. Minneapolis Fed President Gary Stern speaks Thursday at a University of Dayton global investment forum, and Philadelphia
Fed President Charles Plosser speaks at a conference on financing community development Friday in Washington.
Data Watch
New home sales are reported Monday at 10 a.m. ET, while the Conference Board's Consumer Confidence and Richmond Fed Survey are due Tuesday at 10. Durable goods for February are reported Wednesday.
Thursday brings the final revision of Q4 GDP and jobless claims.
On Friday, personal income, personal spending, the Chicago purchasing managers and construction spending are reported.
The markets are keeping a keen eye on all things housing and mortgage related and will be watching intently as the House Financial Services Committee holds a hearing on subprime mortgages and foreclosures Tuesday.
Cars and Corn
CEOs of the big three U.S. auto makers, that is General Motors , Ford and Chrysler meet with President Bush Monday to continue their discussions about fuel economy and the global competitiveness of the industry. They will talk about Bush's proposal to cut fuel consumption by 20% over 10 years with tougher mileage standards and alternative fuels.
Reuters interestingly points out how Toyota has been left out of the meetings, despite its growing role in the U.S. car industry with its entrance into the top three car selling ranks and its focus on alternative energy technologies. (Meanwhile, the United Auto Workers gather this week to prepare for contract talks with the Big three. They will no doubt grapple with give backs and the possible sale of Chrysler).
Grain traders, once toiling in an unlit part of the financial markets, will be under the bright lights of CNBC Friday when the crop report is released by the Department of Agriculture. Just as President Bush plays up ethanol and alternate fuels, we've reported on how the ethanol boom is firing up corn prices and driving hot investment dollars into a once sleepy part of the markets.
The crop report looks at how many acres farmers are expected to plant with corn and soybeans. The Wall Street Journal Saturday discussed the upcoming report and says big investors have unloaded some corn futures positions in anticipation of the report.
Big Conferences
The American College of Cardiology started meeting in New Orleans this weekend. The always newsy conference is being covered by our Mike Huckman. On Tuesday, a widely anticipated study on stents will be released. It is expected to have potentially market moving news on the value of stents.
We will also be covering the wireless industry's big annual event, the CTIA Wireless show. It runs Tuesday through Thursday in Orlando and our Jim Goldman will be there.
Box Kicked
TMNT, an animated update of the 1980s Teenage Mutant Ninja Turtles, kicked the bloody "300" from the top spot at the box office this weekend. Time Warner's turtles took in $25.4 million. "300," the bloody battle of the Spartans and Persians took in $20.5 million, bringing its total to $162.3 million in three weeks.