The Euro is likely to have a few rough weeks ahead that may cause indigestion for some at Thanksgiving. The problems in Europe still linger and, along with the fiscal cliff in the United States, likely will take center stage in the coming weeks. A couple of things coming up in Europe are:

1) The EU must pass a budget, which is proving to be difficult. Imagine if the United States had to have its budget approved by all 50 states. That has to happen in Europe. France wants more largesse, while Britain is demanding cuts.

2) Catalonia will be voting for a new government, but really voting for independence from Spain, on November 25th. This vote could have major ramifications for Spain, the rest of Europe and the Euro.

The risk of a market fall because of European problems and/or the fiscal cliff will weigh heavily on the market for the remainder of the year. With two years to go until the next elections, it might be appealing to some lawmakers to allow the fiscal cliff to affect the stock market to the point that it causes a “crisis situation” in order to get things done. These same politicians will hope that the voters will completely forget about such a crisis by November 2014. We certainly hope cooler heads will prevail and a crisis will be averted, but the risk is high until a solution is finalized.

Sincerely,

Your THOR Team