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After a quick tease to the upside on Monday morning, US markets dipped drastically as numerous factors converge this week to keep investors on edge, the most immediate of which - Italian elections - likely played a role in the afternoon drop.  Initial indications from Italy were that the party of economic reform would hold a large percentage of the government after the results were known, but later reports hinted at an impasse, evidence that the potential is there for Burlusconi's party of 'Bunga Bunga' could return to power.  Given the already unstable stance of Europe's economic recovery, investors world wide are hesitant to entertain any event that could grow that instability moving forward.  Regarding Italy, specifically, investors care because the economy there was not too far off from being as big a mess as Greece's before reforms were put into place, and a return to the ways of old could lead to even bigger concerns throughout Europe as a whole. 

That said, it's unlikely that Italian elections alone sparked Monday's broad market sell-off, but they certainly played a part.

More likely it's the gridlock in Washington that had investors anxious at the week's open, and this week could be a volatile one if a budget deal is not reached.  The prospects of drastic cutbacks and furloughs are real and investors - who are fully aware of the impact a slash in defense spending had on the fourth quarter GDP numbers - may be concerned over the impact another round of such cuts could have, especially given the ancillary signs that consumer spending may be on the decline, too.  As described over the weekend, however, those signs could be proven or dispelled once the notable group of retailers slated to report earnings over the coming days offer their own guidance...

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AntriaBio, Inc. (ANTB) is an emerging story in the developmental biopharmaceutical sector that may be worth keeping on the radar as volume has been picking up of late and the company's potential to alter the scope of the future insulin delivery market by creating a once-weekly injection of insulin to replace a once-or-twice daily version is starting to gain increased exposure from popular financial media outlets and from the investing community as a whole.  Relatively new to the trading scene, AntriaBio became public through a reverse merger earlier this year after having first purchased the assets of PR Pharmaceuticals from bankruptcy court.  PR Pharma had already invested tens of millions of dollars into the preclinical development of the above-mentioned once-weekly basal insulin shot, now known as AB101, but was unable to see its development through to fruition as the depths of the economic crisis dried up funding for many developmental biopharmas.  

Now controlling the AB101 assets, AntriaBio has positioned itself, pending successful trials, to eventually enter the multi-billion dollar market of basal insulin delivery that is now dominated by Sanofi-Aventis' Lantus and Novo Nordisk's (NVO) Levenir, each of which requires patients to receive at least one shot daily.  Those two products alone pull in over eight billion dollars annually, highlighting the potential of AB101 to to steal quick market share, should it reach the point of commercialization.  Emphasizing that once-weekly advantage, it's understandable why AB101 would be attracting the increased attention that it is right now, as some investors may consider this a ground floor opportunity of a potential next-generation technology...

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Stocks gave us a wild ride last week as numerous factors converged to incite more extreme market volatility that we had seen since the conclusion of the fiscal cliff drama at the beginning of the year. The DOW jumped over a hundred points on Friday, following two notable down days, and closed the week above the 14,000 mark again, albeit barely. The volatile trading action is likely to continue into the new trading week as budget negotiations in Washington will likely dominate headlines and keep investors on edge. Unlike the fiscal cliff talks that resulted in a last-minute deal during the dawning hours of 2013, both sides look more inclined this time around to hold their ground, which means that the potential is high that the much-discussed sequestration measures will come into effect on Friday morning. Such an even would translate into swift federal spending cuts that have the potential to negatively impact the overall economy, let alone stall the recovery.

Another event with market-moving implications to keep an eye on this week is Fed Chairman Ben Bernake's date with Congress. Much of last week's mid-week drop was attributed to statements from the Fed that stimulus measures long in place since the depths of the recession may be pulled back earlier than previously indicated and Congress on Tuesday and Wednesday will hear personally what Mr. Bernanke has to say in those regards. Friday's rebound provided some evidence last week that investors may have felt they overreacted by selling into the Fed comments last week, there's little doubt that Mr. Bernanke's comments this week will be heavily watched, especially in light of recent developments in Europe over the weekend.

Sooner or later those European concerns are likely to effect trading on this side of the pond again. With the enthusiasm of the January rally and the encouragement of this earnings season, investors easily brushed aside any concerns of a stalling global recovery, but analysts predicted last week that the European economy had at least another year of recession and turmoil on the table before reversing course and climbing into growth.

Warnings of slow growth were even apparent in the supposed powerhouse economies of Germany and England, but the light was dimmed even more when Moody's downgraded the UK's Triple-A credit rating. It's yet to be seen how much of an impact that move will have on the European or global markets, but it's an eye-opener heading into the new trading week.

Also this week, the Italian elections will be in the spotlight and it'll be a disappointing sign if Italy votes Berlusconi's 'Bunga Bunga' squad back into power, as it's time for the Italian economy to embrace the financial reforms that have been put into place since his ouster and not reverse course back into the all-too-recent past. That said, there's little doubt that the worst of the worst is in the rear view mirror for the Euro Zone (EZ) as a whole, but it's evident that the light at the end of the tunnel is still a ways off in the distance.

Bernanke's comments, US budget talks, looming sequestration and the EZ's continued strife could lead to a volatile week ahead. As is always the case, there will be plenty of individual stocks and stories to keep an eye on while the major news plays out. Here are just a few of them for the week of 25 February, 2013...

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The markets headed south on Wednesday as investors digested Fed comments, housing numbers and the potential negative impact on the economy that a political showdown in Washington could bring. Comments released from the Fed this week indicated that an easing of the stimulus measures that have been in place since the depths of the financial crisis may be forthcoming. As noted earlier this week, investors pretty much shrugged off similar comments in January, but a re-emphasis of those statements this week - coupled with the recent slowdown in housing numbers - caused enough concern among investors to spark the round of profit-taking that led to Wednesday's decline.

Budget negotiations in Washington also look to be at a standstill, another cause for alarm over the short term. Severe spending cuts could be in store come 1 March, should an agreement not be reached in D.C. As the politicians continue to draw lines in the sand, it's looking more likely every day that a deal might not be reached this time around, as was the case during the last 'fiscal cliff' scenario. Cautious investors predicting a stalemate in negotiations may be prepared to pull some money from the table now in anticipation of an broad market slip, as indicated by Wednesday's drop...

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Stocks head into this holiday-shortened week on a flat note after having traded mixed during most of last week. No news or key developments have been strong enough of late to launch another attack on the record highs set just prior to the global economic collapse in 2008 and many pundits and market analysts are starting to predict that a fairly significant pullback could be in store, even as the major markets hovered at or near their multi-year highs leading into this week's opening bell.

The earnings season also winds down this week, which means attention could quickly shift towards budget cuts and politics again, especially with a March 1st deadline still looming for politicians to finalize a full budget for the first time in years. Given recent indications that a breakdown in Washington's cooperative tone could be in the works, investors may be preparing for another period of volatility dominated by skittish investors. Such a scenario would likely provoke additional profit taking after January's rally and also help to support those recent theories that a pullback is in store...

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Markets in the U.S. closed flat on Wednesday as investors postured their positions in anticipation of a push towards record highs. International investors were also holding back for the day while awaiting comments from the European Central Bank (ECB), which is due to hold a policy meeting on Thursday. Positive comments from the ECB indicating that the eurozone looks to be on the road to recovery may reinvigorate the early-year rally, but a more cautious tone may have some investors inclined to pull profits from the table following the January run. Given recent insights into a few of the zone's individual economies, such as Germany's - which many report a quarter of retraction - and Spain's - still struggling to find solid footing - comments to the tune of "we're not quite there yet" should be expected.

The key to all the Europe talk lately is that the media is again paying attention to developments over there, while they haven't been during the opening weeks of the new year. Since the European recovery is still lagging behind that of the U.S.', investors tuning into the news may entertain the fact that the markets are not yet stable enough to sustain near-record highs. Any surprises from the ECB either to the up or downside could lead to the U.S. markets trading in-line with those comments on Thursday, but it's more likely that U.S. investors will be more interested in the budget talks in Washington and to the individual stocks and stories of their respective portfolios...

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Volatility is back. After a few weeks of stability and a methodical uptrend in the markets, this week brought us, so far, back-to-back one hundred point moves in the DOW as investors contemplated the probability of the markets sustaining levels at or near the record highs set before the crash of 2008-09. Big media started paying attention to Europe again, an eventuality we've discussed for a couple of weeks now, and as a result some of this week's volatility has been due to reports of the still-lagging economic recovery over on that side of the Atlantic. Moving forward, such concerns are still likely to play a role in the overall market action and spark some continued volatility, but for the immediate future investors look to want to shake off the European worries and trade on the momentum of this quarter's earnings reports, which have been solid all season long.

Still, as the influx of cash into the markets seen in early January subsides - and the cautionary tales from Europe continue - many will look to prepare their portfolios for the possibility that a pullback will take shape. The warning sign will be, in my opinion, when the media outlets start harping on European worries, which has already started to happen...

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At the start of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous week, and may also be positioned make headlines or influence trends during the upcoming week as well.

Investors liked what they saw last week from the major jobs reports, even though the overall unemployment number ticked modestly higher, and stocks surged yet again, allowing the DOW to breach - and then hold - the 14,000 mark. Other economic data released during the week and a 'status quo' approach by the Fed urged investors to shrug off a fourth quarter GDP pullback and continue the buying that allowed the January rally of 2013 to continue. This week, though, a pivot point should be met where investors decide whether to keep charging with the buying momentum or start banking some profits, given the sharp rise in stocks since the fiscal cliff deal was announced at the dawn of the new year. There's little doubt that the US economy has undertaken a solid recovery over the past couple of years, but the debate will rage as to whether or not the economy is on sound enough footing to justify the setting of new market highs.

On first glance, there's the argument that the markets are forward looking, and although the economy may not be at a point right now that justifies new record highs in the stock markets, that point may come in the not-so-distant future. Additionally, given the transparency seen today in the strength of the recovery, when compared to the false bubble of nearly five years ago, investors are apt to be more comfortable with continued buying now than they were at any other point in the last half decade...

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Stocks ended the day slightly lower on Wednesday as reports hit the wires noting a retraction in the US growth rate for the fourth calendar quarter of 2012. Analysts and experts had expected a one percent growth rate for the quarter, so the miss came as a bit of a surprise. The markets did not falter, however, and only modestly declined as the retraction came about largely due to a drop in federal defense spending, and not because of any other variables of weakness that would threaten the strength of the recovery.

In fact, other economic indicators behind the report looked strong, as outlined in a New York Times article on the subject. A stand-fast approach by the Fed, which concluded its meeting on Wednesday, also helped to reassure investors that no drastic changes to policies and procedures already in place are forthcoming. Barring any unforeseen news or a reversal in the trend of this quarter's earnings reports, it should be smooth sailing ahead for the remainder of the week.

Another day is upon us to keep an eye on some hot earnings stories and other stocks that could potentially move markets, individual sectors or personal portfolios. Here are just a few of them for Thursday, 31 January, 2013...

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