The 3 E’s–Earnings, Economy and Europe

While investors brace for the upcoming earnings season, Europe, and Spain in particular, are still on the radar, while the economy remains front and center.

Sluggish growth has liquidity-addicted traders hoping for a lifeline from the Fed, but the latest minutes the last meeting offered few concrete signs that a new burst of liquidity is on the way.

A few Fed members thought “further policy stimulus likely would be necessary,” but  several others felt new actions “could be warranted if the economic recovery were to lose momentum.”

The Fed will never send a definitive signal of future action, but traders were hoping for something a bit stronger.

With interest rates at a record low, however, many doubt a flood of new cash into the financial system would have much impact on the real economy.