Monday morning, you sure look fine

David Brancaccio Nov 28, 2011

You know how you feel on Monday morning after a long weekend? Refreshed, full of ideas, perhaps just a little more optimistic about your job? Well, it seems investors felt the same way. The markets hit a November high, with the key indexes up between 2 and 3 percent all day. Driven by news that the European Union may have a new plan to contain its debt crisis and record holiday retail sales over the weekend, investors came out of their tryptophan haze, saying “Buy!”

The news that Europe has a new plan comes in the nick of time. The key proposal today involves establishing “budget cops” with enforcement powers to keep budgets of individual countries in line. That sense that someone is minding the store could reassure Germany enough that it would approve the European Central Bank acting as the lender of last resort. The Germans have been resistant of fear that the countries that started the crisis would not be held accountable for their debt.

We talked with Robert Pavlik, chief market strategist at Banyan Partners. He says this new European plan is promising, but it’ll take time to implement. The countries that will be policed are going to have to give up some sovereignty. Pavlik says they’ll likely do it simply because it’s the only thing that can really save these counties. Otherwise, the eurozone breaks up and those countries probably default. That would have a devastating economic impact on the entire region.

As for the record retail sales, Robert Pavlik says with 70 percent of the U.S. economy driven by consumer spending, the fact that consumers are out there doing their part for the economy is a good sign. The question now becomes: Will it continue for the rest of the holiday season? If it does, Pavlik says it should help lift stock prices for the near future.

Market watchers will keep an eye on Cyber Monday sales and look ahead to the monthly unemployment numbers coming out later this week.

Also on today’s show, declining copy paper sales have the office supply industry looking for new marketing gimmicks. You know the fake paper company on the TV show “The Office?” Its fake brand, Dunder Mifflin, could become a real brand.

The Wall Street Journal reports today that an online subsidiary of Staples will launch Dunder Mifflin-branded paper. The $3 billion a year market for copy paper has been falling with all the email and pdfs. And that slows the Marketplace Daily Pulse today.

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