Economic data, politics to drive stocks in the week ahead

Economic data in the U.S., and financial/political machinations in Europe are likely to drive stock-market performance this week.

Among the statistics traders will get to ponder are consumer confidence on Tuesday, durable goods orders and a speech by Fed Chairman Ben Bernanke on Wednesday, and pending home sales on Thursday, along with the regular release of new jobless claims.

Traders will be closely watching the European Financial Stability Facility vote taking place in Finland on Wednesday and again on Thursday in Germany.

Tomorrow, Greece will vote on the first of many tax increases.  Tuesday’s property tax increase vote will be watched by officials for signs that Greece is capable of passing the outline austerity packages that politicians have already approved.

On Wednesday, Bernanke is in Cleveland for a speech on emerging markets, though Fed watchers will be listening for any possible language that may open the door for an increase to the balance sheet from efforts to reduce long-term interest rates. Traders will also be listening for language that telegraphs a third round of quantitative easing.

The ProShares Short Dow 30 (DOG, quote) gives investors an opportunity to profit from declines in the Dow Jones Industrials Index that might follow poor economic data. The fund seeks to be the mirror image of the index, rising when the Dow 30 falls, but declining when the Dow heads higher.

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