Markets are looking to see what happens on a few fronts right now. There is interest in what is next for the eurozone, thanks to the rumors that Spain might be ready to cave and ask for bailout funds. On top of that, the Middle East could be flaring up again, as protests and outrage continue. And, of course, the new iPhone 5 is out. Apple is providing plenty of focus for investors as well.
Spain and the Eurozone
Probably the most influential news this week will be what happens with Spain. The rumors are that Spain will unveil its plan for fiscal reform. There is speculation that such reform indicates that the country is finally ready to ask for aid from the European Stability Mechanism. With the German Constitutional Court giving its implicit blessing on the facility, countries can move forward with aid requests.
There are hopes that Spain will ask for a bailout — even though Spanish citizens are already protesting austerity measures. One of the reasons that Spain has been slow to ask for help is that the help comes with strings attached. Spanish politicians just haven’t been ready to face the backlash. Now, though, that could change. Markets would cheer an action to help shore up Spain and reduce the problems associated with sovereign debt in the eurozone.
Middle East Continues to Seethe
In the Middle East, there are concerns about what could happen if continued protests and outrage interrupt oil supply. There are issues in Libya, Syria, and Pakistan, and a variety of problems throughout the region. Continued unrest could provide another measure of volatility to the markets, especially in terms of oil prices and oil related assets. And, if something in Europe is resolved (like Spain asking for aid), focus would shift a little more toward the Middle East. There is a lot of potential for disruption there.
With the iPhone 5 now out, many are looking to see what’s next for Apple. The company’s share price continues above $700, and records were shattered with Friday’s release of the iPhone 5. While AAPL won’t be driving the stock market on its own, there is a lot of interest in the stock, and the company seems to be doing fine, even without Steve Jobs at the helm. And, without Jobs, a quarterly dividend is being paid, and there is a chance that the dividend will increase.
This week should be interesting. Keep your eyes open for what might be next.