European Shares Rally, Oil Up Another 1 Percent; The Week Ahead

European shares are rallying on Monday led by European financial stocks on a day when the U.S. market is closed for President’s Day.

Crude oil rallied 12 percent on Friday, the largest one day gain in 7 years, and is up another 1 percent on Monday, continuing the rally on Friday that was largely based on a Wall St. Journal report about the oil minister from the United Arab Emirates claiming the OPEC countries were willing to cooperate with non-OPEC countries on a production cut.

That news resulted in a large amount of short covering with oil traders.

Leading OPEC member Saudi Arabia has been unwilling thus far to make a production cut because the oil export nation is fighting for global market share.

If crude oil prices continue to rally, more U.S. shale companies (non-OPEC) will likely increase production to increase their market share.

Weaker global growth and a glut in crude oil are the prime reasons behind the nosedive in crude oil prices.

The Week Ahead

Investors will have a moderate amount of economic data to react to during the shortened trading week.

On Wednesday Fed Minutes from the January 27th FOMC meeting will be released along with PPI inflation figures for January.

On Friday CPI and Core CPI inflation data is released.

Full Calendar

Monday- U.S. market closed

Tuesday- Empire Manufacturing (Feb.), December Net Long Term TIC flows

Wednesday- FOMC Minutes, PPI and Core PPI inflation (Jan), Housing Starts and Building Permits (Jan), Industrial Production, Capacity Utilization (Jan.), Crude Inventories, MBA Mortgage Index

Thursday- Initial and Continuing Jobless Claims, Philadelphia Fed, Natural Gas Inventories

Friday- CPI, Core CPI (Jan.)


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