I mentioned how I wouldn’t post a Weekly Bull/Bear Recap for the prior week.  However, given how important it was imho, I decided to do a belated report just to “register” everything.  

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Bull

+ The Eurozone still has an opportunity to resolve the crisis without it critically damaging the recovery.  The region’s most important generators of growth: the French and German economies, showed signs of resistance with GDP growth notching annualized growth rates of 1.6 and 2.0% respectably.  Even if the region fell into recession, the effect on the U.S. economy is absorbable.  

++ The U.S. economy is resistent to European woes:

• The Conference Board’s Leading Indicators post a strong rise and confirm that the U.S. economy may in fact accelerate during the early part of 2012.    
• Jobless claims fall to their lowest levels since April.  The job market is improving before everyones’ eyes.  It’s important to note the strong correlation between the S&P 500 and the trend in jobless claims.  The market will catch up with economic reality very soon.
• Retail sales for the month of October rise 0.5% after a 1.1% surge in September.  Core Retail sales log in their strongest month since March and the headline measure has risen 5 months in a row.  Weekly Retail Metrics show the beginnings of a “surprisingly solid holiday shopping season”.  
• It’s not just the consumer who’s showing increased mettle.  Manufacturing data shines as the November Empire Manufacturing Index reverts back to growth after 5 months of contraction on the back of an increase in shipments.  Expectations rebound to 39 from 6.7.  Industrial Production (Factory output) for October grows for the 4th month in a row, up 0.5% from 0.3%.  
• The Housing market is showing signs of life with the Housing Market Index posting a reading of 20 for the month of November.  While this remains in recessionary territory, when coupled with other housing related indicators, such as housing permits, one can see that the sector has hit bottom already and is slowly on the road to recovery.     

+Producer Prices fall more than expected in October, down 0.3% MoM.  The YoY rate declines from 7.0% to 6.1%.  U.S. wholesale prices in for the same month fall at the fastest monthly rate since February 2010.  Meanwhile, CPI unexpectedly declines as well.  The Fed Hawks have little reason to stand in the way of further QE.  Risk assets, especially commodities, will benefit as the doves take charge.     

Bear

- European data continues to point to recession.  The Eurozone economy grew at its weakest rate since exiting recession over 2 years ago, with an annualized growth rate of 0.6% for Q3.  While the bulls may point out that the German and French economies showed signs of resistance to the overall glum results, it may serve well to note that Germany's ZEW Economic Sentiment indicator just plunged to -55.2 in November from -48.3 (…to go along with the country's dismal Industrial Orders report from two weeks ago) and that France is implementing austerity. Eurozone-wide Industrial production sinks 2.0% in September and Italy’s Industrial Orders report shows a cratering of 8.3% in September.  These terrible metrics come packaged with 3-year high inflation.          

- European technocratic governments will not solve the structural problem.  In fact, they may make the situation worse, given their illegitimacy.  Further austerity will lead to this dawning realization.  Spain douses prospects of successful adherence to deficit targets, while “alarm bells are ringing” in France.  The ECB sticks to its view that the Securities Market Programme is only temporary.  This results in an explosion of various bond spreads, from Austria to France to Belgium.  Italian 10-yr yields of BTPs burst through the 7% level again; French OAT/Bund spreads soar to Euro-era highs; the Spaniards have a failed auction (Bonos respond in-kind); and even German bunds aren’t bought fervidly anymore.    

- Global economic data is deteriorating further.  Where will the growth catalyst come from?  China is hesitant to loosen monetary conditions too quickly, despite inflation coming down.  Warnings of a banking crisis and a popping property bubble grow louder.  Japan cuts its economic outlook due to weaker global conditions.  India remains mired in stagflation.  

- The housing market isn’t going anywhere.  Mortgage applications for purchase remain near decade-lows.  Furthermore, the manufacturing sector isn’t showing broad growth anymore, and with a deteriorating global economy, won’t provide the solid source of growth that the bulls have grown accustomed to.