Simply Economics

Loose Fed policy continues. What does it mean for traders and investors? The Dow continues to hit record highs. The latest jobs report was better than expected. What should you be looking for this week?

Sequestration kicked in Friday, March 1, but the economy is still showing signs of life. The Fed is taking action to keep the recovery--such as it is--in motion despite the latest fiscal impasse. What does it all mean for traders and investors?

All Fed all week! The markets wheeled around Fed announcements.

No one ever said the economy moves in a straight line. And data coming in for January makes this point. Some key indicators slowed but there are early signs of improvement in February.

As earnings season winds down, companies for the most part continue to (somewhat) beat expectations while economic indicators point to further (but moderate) economic growth. Find out what made last week a (mostly) good week.

Q4 GDP took a surprising dip, and though employment numbers were good, the unemployment rate went up! What's going on? A vast array of additional indicators were positive, propelling the Dow Industrial Average to a new high.

Much of this week's housing news reflected sizeable swings over the last two months-as is common during the off season. But downgrades to earnings expectations appear to have been premature as profits and revenues generally are topping lowered forecasts. There are key exceptions, however, on the downside.

There has been much talk about a stalling recovery and sluggishness in earnings. This past week showed notable gains in several sectors of the economy-the consumer, housing, and industrial production.

Economic news was limited this week. And apparently exhaustion has set in temporarily on addressing fiscal cliff issues (yes, the spending cut issues remain). Focus has largely been on corporate earnings with expectations generally lowered but making it easier to beat.

Markets have been fixated with how and when the U.S. fiscal cliff would be resolved. This past week included passage of an income tax package that retained income tax cuts for most individuals.

Fiscal cliff optimism for a resolution rose and fell during the week. Despite disappointment Thursday night on a House vote that did not occur, optimism about a temporary resolution appears to be outweighing pessimism.

No, the fiscal cliff problem has not gone away. However, the Fed's FOMC met and it was one of the four meetings that occur in the third month of the quarter.