Weekly ETF Rewind - Week 51 (12/19/08)

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Another historic policy week left the S&P 500 down just a fraction after the Federal Reserve cut its key lending rates to all time targeted lows of 0% to 1/4% (SPY -0.1%). This move had the effect of putting strong additional pressure on the US Dollar, leaving Bonds at bubbly highs even as Crude Oil fell to an incredible $33/BBL, nearly 80% off its summertime peak. (Bloomberg - Dollar Touches Lows on Cuts)

Also impacting the week was Friday's ultimate resolution to the $17.4B intermediate Auto-bailout package, sending Big-Three stocks soaring back from fears related to structured bankruptcy negotiation tactics espoused by the White House just a day earlier. (CBS - Mixed Views)

Week 52 is holiday shortened, but nonetheless contains the final Deflator and GDP readings, Home data, and Personal Income measures among others, as follows:

• Yahoo! - U.S. Economic Calendar
• Yahoo! - U.S. Earnings Calendar

I am a bit concerned over just how quickly the VIX (implied options volatility) has fallen given its mean-reverting, price-inverse tendencies, but this is moderated to a degree by the advent of the holidays, the pending end of month, and the more immediate implications of this week's policy announcements. Enjoy your weekend and have a warm holiday season!

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