How much longer will Europe dominate our headlines? Markets started off last week with a bang and managed to hold their gains long enough to snap a three week losing streak. The S&P gained 1.74%, the Dow rose 0.69%, and the Nasdaq notched up 2.11%. Most of the action was driven by bargain-hunting traders striving to snap up deals in advance of potential rallies. Perhaps most impressive about the week’s performance is that it came in the face of continued gloom from Europe. The few economic reports released last week were generally lukewarm, with unemployment flat, and home sales slightly up. Worries about Europe weren’t helped by the announcement by a former Greek prime minister announcing that Greece may be considering exiting the Euro. However, European leaders are due to meet next week to discuss plans for promoting growth and preventing the recession that grips half the region from dragging down the global economy. Results of the meeting could mean a larger role for the European Central Bank or the use of controversial Eurobonds (guaranteed by the Eurozone as a whole) to bail out ailing economies. It’ll be difficult to get a clear picture of what the next few months will bring in Europe until Greek elections on June 17 – which will define how the new government will abide (or not) by austerity agreements. As a result, the slew of U.S. economic indicators being released next week will probably feature heavily in trading. If headlines reveal that the economy is still chugging along, it should divert attention away from Europe and provide investors with incentive to jump back into equities. On the other hand, bad economic news could indicate that the Eurozone contagion is spreading and cause further declines. As always, only time will tell the story. On a side note, one silver lining in the Europe situation is the strengthening of the U.S. dollar, which could cause more money to be poured into dollar-denominated assets as investors flee a threatened euro. With the markets poised to jump whichever way the headlines blow, we strongly believe it is best for long-term investors to stick to their strategy while maintaining enough flexibility to adjust course if the situation calls for it. We pledge to keep monitoring world events as they unfold, and to keep you informed. ECONOMIC CALENDAR: Tuesday: S&P Case-Shiller HPI, Consumer Confidence, Dallas Fed Mfg Survey Wednesday: Pending Home Sales Index Thursday: ADP Employment Report, GDP, Jobless Claims, Chicago PMI, EIA Petroleum Status Report Friday: Motor Vehicle Sales, Employment Situation, Personal Income and Outlays, ISM Mfg Index, Construction Spending HEADLINES: Durable goods orders rose 0.2% in April after a 3.7% decline the previous month. According to the Commerce Department report, gains in commercial aircraft orders and more demand for autos and parts drove the modest increase. Oil dropped below $90/barrel for the first in time seven months in trading on Wednesday as U.S. supplies continue to grow. Gasoline prices have followed the decline and dropped 26 cents since peaking in late April. Consumer sentiment rose in May to the highest level in four years. The Thomson Reuters/University of Michigan's report claimed that higher wages and optimism about the job market helped push consumer sentiment to its highest point since October 2007. Investors sue Facebook over pricing and trades. The commotion surrounding the tech giant’s IPO should serve as a warning to investors about chasing the latest fad or hot stock. QUOTE OF THE WEEK: “Go on a rampage of appreciation, rather than discussing the evils of the world, and offer joyful commentary whenever possible”. Dr. Wayne Dyer