Summer's Over: Weekend Reading

Good Sunday afternoon, and welcome to another edition of Weekend Reading. First a look back at the week that just finished, then a look forward to the week ahead, and, lastly, a summary of articles and research papers worth reading.

It was a rocky week for the U.S. markets, but not as bad it first seemed it might be. The S&P 500 dropped 1.2%, the Dow was down 1.1%, and the Nasdaq lost 0.5%.

This was mostly a continuing market correction, but poor economic news helped. Unemployment remained weak, and there is little evidence of a sustainable economic recovery in most OECD countries absent continuing government stimulus. The U.S. is admittedly an edge case in that regard, with weakness looking deeply ingrained and systemic, but the point is the same.

Looking forward to next week, volumes should be on the rise as traders return from summer holidays. I would expect that effect to be less pronounced than usual given the increasing importance of nondiscretionary trading in most markets, but the psychological impact will be as large as ever. Will investors come back and turn up their noses at a weak recovery, or will they look through that recovery and see something they like better (or worse) on the other side?

Turning to economic indicators, we will see initial weekly jobless claims, the preliminary September reading of the Reuters/University of Michigan Consumer Sentiment index, the U.S. balance of trade and the Federal Reserve's Beige Book.

On the earnings front, the following companies plan to report: Campbell Soup(CPB Quote), Pep Boys(PBY Quote), National Semiconductor(NSM Quote), Smithfield Foods(SFD Quote), Talbots(TLB Quote) and Men's Wearhouse(MW Quote).