The market-moving news for the week of May 3 began in Omaha on May Day, where Berkshire Hathaway held its annual meeting and where Warren Buffett and Charley Munger opined on the company’s strategy and on China. Then on May 2 came word from Europe that Greece had agreed to an austerity and revenue-raising plan with the IMF and other euro-zone countries that will give it aid worth 110 billion euros ($147 billion)–see the Weekend Interview conducted by John Sullivan for more insight into the Greece crisis.
Major market indexes were down last week, as reported by Janet Levaux in the Weekly Roundup, and while the continued growth in GDP reported April 30 and the Greece deal should supply a confidence boost to the markets, players will also be looking at what may be telling economic reports this week. They start with personal income and spending on May 3 (increases in both indexes), move to preliminary factory orders and pending home sales on May 4, include industrial productivity and costs on May 6, and climax on May 7 with the most closely watched indicator of the week–the jobs report for April. But on that same day, look for the report on consumer credit for March.
The Senate is expected to start debate on Monday, May 3, on the Dodd financial services reform bill, as Dave Postal reported on April 30, highlighted by the introduction of many amendments–will the Kohl amendment be among them? On May 5 and 6th, the Financial Crisis Inquiry Commission will follow up its Goldman Sachs hearings of last week with an investigation of the “Shadow Banking System,” featuring a host of former Bear Stearns executives, including Jimmy Cayne, a passel of former SEC chairmen, including Bill Donaldson, and two current and former Treasury secretaries–Hank Paulson and Tim Geithner. The Senate Finance Committee holds hearings on President Obama’s proposed TARP fee/tax on May 4. The House Financial Services Committee’s Subcommittee on Oversight and Investigations holds a hearing May 6 on “The End of Excess (Part One): Reversing Our Addiction to Debt and Leverage.”