A Good, if Short, Week, Followed by What?

Following a week in which the stock market rebounded following release of a Citigroup bailout plan and President-Elect Obama's rollout of part of his economic braintrust, December begins with more political announcements from President-elect Obama, but with uncertainly created by the terrorist attacks in India, apparently flat retail results from Black Friday, and worries over the unemployment report looming on December 5.

The New York Stock Exchange posted five positive trading sessions in a row, pushing the Dow Industrials up 1% on the day after Thanksgiving and 9.2% for the week, Despite the good run, the Dow industrials fell 5.3% for the month of November; the S&P 500 fell 7.4% for the month, though it was up 12% for the week.

Meanwhile in bonds, the Federal Reserve said November 25 that it was launching what it called a term asset-backed securities loan facility in a bid to inject liquidity into the consumer loan market. Under the facility, the Fed will, in addition to several other moves, lend up to $200 billion (from the Treasury Department's TARP warchest) to support the issuance of debt backed by consumer and small-business debt like credit-card loans, student debt, auto loans, and loans backed by the Small Business Administration. The Fed action helped to push yields on 10-year Treasury bonds to a record low 2.92% in last week's truncated trading.