The equity markets bounced back strongly last week after a modest correction.  While the problems in Europe have yet to be resolved, relatively robust economic data (with the exception of Friday's payrolls report) helped push the indexes higher across the board.  For the week the S&P added 3% while the NASDAQ tacked on 2.2%.  Commodities were similarly strong with crude oil and copper gaining close to 7% while natural resource stocks added 6%.  Gold finished on a strong note Friday (up $27/ounze) adding 3.7% for the week. 

If you had to characterize the last couple of weeks you'd have to say it is a long drawn out battle between fears about the European debt problems and slowly improving economic fundamentals (particularly in the US) on the other. 

 
Friday's payrolls report stunk.  As late as Thursday night economists thought payrolls would grow 150,000 while the unemployment rate would remain unchanged at 9.6%.  Payrolls actually grew by only 39,000 and the unemployment rate increased to 9.8%.   

On the more positive side we did get a very strong reading on pending home sales in October, portending good news on existing home sales. November's Non-Manufacturing (services) index continues to point towards recovery.  The November ISM Non-manufacturing index was at 55.0%, up from 54.3% in October. Note: Above 50 indicates expansion, below 50 contraction.
 
China's economy doesn't appear headed for a hard landing, at least not yet.  The PMI rose for the fourth consecutive month and is at a seven month high.

Finally, the latest Beige Book in the US (a survey of growth in the 12 Federal Reserve regions) showed 9 districts getting stronger, 2 unchanged and only 1 weaker.
  
As for Europe, there have been mounting fears coming out of Europe for debt default.  Last week Ireland succumbed to calls for a bailout by the European Financial Stability Fund and the IMF, and now the spotlight shines on Portugal, Belgium and Spain. 
   
So as always the investment outlook comes down to a judgment call.  If one believes the European problems are more important than the global growth theme then a defensive portfolio allocation is appropriate.  But if I had to guess, I'd say the credit problems in Europe will spread to Portugal and Belgium, but authorities will finally capitulate and either enlarge the stability fund or the ECB will print.  Under this scenario there is another scare/correction in the first or second quarter next year, but it doesn't turn into a systemic problem.  

 I was looking for a checklist that would delineate the steps you can take now to prepare your home for winter and found this article on www.kiplinger.com.   Although a couple of things may not apply to us in Sacramento (no snow) but I believe it does a good job of outlining the steps you can take now to avoid problems during those cold and frosty months.  The article has been edited due to space constraints but you can read it in its entirety at http://www.kiplinger.com/features/archives/fall-winter-home-maintenance-checklist.html

1. Tune up your heating system. For about $80 to $100, a technician will inspect your furnace or heat pump to be sure the system is clean and in good repair, and that it can achieve its manufacturer-rated efficiency. The inspection also measures carbon-monoxide leakage.

2. Reverse your ceiling fans. If your ceiling fan has a reverse switch, use it to run the fan's blades in a clockwise direction after you turn on your heat. Energy Star says the fan will produce an updraft and push heated air from the ceiling down into the room. This is especially helpful in rooms with high ceilings -- and it might even allow you to turn down your thermostat by a degree or two for greater energy savings.

3. Prevent ice dams. If your home had lots of icicles last winter -- or worse, ice dams, which can cause meltwater to back up and flow into your house -- take steps to prevent potential damage this year. A home-energy auditor or weatherization contractor can identify and fix air leaks and inadequate insulation in your home's attic that can lead to ice dams.

4. Hit the roof. Or at least scan it closely with binoculars. Look for damaged, loose or missing shingles that may leak during winter's storms or from melting snow. Check and repair breaks in the flashing seals around vent stacks and chimneys, too.

5. Caulk around windows and doors. Richardson says that if the gaps in the exterior joints of a window frame between the window or door frame and the exterior wall are bigger than the width of a nickel, you need to reapply exterior caulk. Silicone caulk is best for exterior use because it won't shrink and it's impervious to the elements.

6. Clean the gutters. If your gutters are full of detritus, water can back up against the house and damage roofing, siding and wood trim -- plus cause leaks and ice dams.

7. Divert water. Add extensions to downspouts so that water runs at least 3 to 4 feet away from the foundation, says David Lupberger, home-improvement expert for ServiceMagic (www.servicemagic.com), which connects consumers with service providers.

8. Turn off exterior faucets. Undrained water in pipes can freeze, expand and burst. Start by disconnecting all garden hoses and draining water that remains in faucets. If you don't have frost-proof faucets (homes more than ten to 12 years old typically do not), turn off the shut-off valve inside your home.

9. Have your lawn-irrigation system professionally drained. Your sprinkler service will charge $50 to $150, depending on the size of the system. As with draining spigots, doing so for sprinkler-system pipes will help avoid freezing and leaks.

10. Test your sump pump. Slowly pour several gallons of water into the sump pit to see whether the pump turns on. You should do this every few months, but especially after a long dry season or before a rainy one.

11. Call a chimney sweep. Before you burn the Yule log, make sure your fireplace (or any heating appliance burning gas, oil, wood or coal), chimney and vents are clean and in good repair. That will prevent chimney fires and prevent carbon monoxide from creeping into your home.

12. Avoid the rush. Don't wait for the first snowstorm or ice storm to restock winter essentials, such as salt or ice melt.