All eyes will be on Europe this week, undoubtedly with special emphasis on Greece and the steps they will be taking to restructure their debt. How the markets will react to any perceived positive reports should tend to be positive if last week's weekly gain is any indicator. Meaning that for all the underlying truths that fly in the face of "positive" reports from Europe last week that steps are being taken to avoid financial disaster, the markets still ended on a relative high. So, even though by the admission of many top European economists that all any settlements or agreements that may take place this week will amount to is, in effect, a kicking of the can down the road, the bulls will focus on the positive and probably cause markets to be in the green.
It should be noted that at the time of writing this post, Asian markets have opened positively based on sentiments that Europe is moving closer to settling its debt crisis.
However, there are new pieces of economic data set to be released this week that could undo any positive effects a Greek settlement could have. Existing home sales for the month of May are predicted to drop to 4.8 million, down from the previous 5.05 million. Home prices are also set to be released. Ben Bernanke is set to give a speech on the same day the Federal Open Market Committee is expected to announce it is keeping interest rates in the 0-.25% area. Then, later in the week, comes the latest jobless claims statistic as well as other data such as the latest GDP revision.
With none of these pieces set to be released Monday and fresh off a weekly gain in the markets, as well as growing positive sentiment that Europe is getting its act together (even though it's really not), all signs point to a bullish opening to the week. However, the bears are still coming out and a day in the red would not come off as a total surprise.