Europeans band together

Optimism surrounding the Europeans' newest solution to the debt debacle sparked a rally across markets worldwide. Led by Germany and France, European nations stated intentions to ensure that their banks will remain strong, while calling upon international organizations to help aid troubled nations like Greece and Portugal. These actions spurred a sizable rally in the European currency, which climbed over $1.35 on Friday morning, up 3.6 cents (+2.7 percent) during the week.

Alongside the Euro's rally, other markets climbed on hopes that a stronger Europe could increase economic strength worldwide. Markets were buoyed even more when the U.S. Bureau of Labor Statistics released its monthly nonfarm payrolls statistic, which showed a growth of 160,000 jobs over the last two months, much more than had been expected. Despite this rise in job growth, U.S. unemployment remains high near 9.1 percent.

In response to this week's positive news, U.S. stock markets rose sharply, with the Dow Jones Industrial Average climbing back to 11232 (+7.6 percent), while industrial commodities like crude oil and copper climbed as well. On Friday morning, crude oil for November delivery reached $84 per barrel (+12.1 percent) and copper catapulted to $3.33 per pound (+5 percent).

Last week's large declines in U.S. equities resulting from toxic Greek debt seemed an overreaction to some investors. Despite this, others see a potential Greek default as a harbinger of further debt woes to come. Portuguese and Spanish banks invested heavily in Greek debt. If those banks are forced to eat losses on the Greek debt, they too could fail, triggering a domino effect that could spread across Europe, and even to the United States. Along these lines, a major credit rating agency downgraded the ratings of Spanish and Italian debt midday Friday.

Natural gas sinks near one-year low

Natural gas prices continued to decline this week, falling to an 11-month low on Friday morning at $3.47 per million British thermal units. Prices are under pressure due to unseasonably warm weather, which is keeping heating demand low. More than half of Americans heat their homes using natural gas, which dramatically increases demand for the fuel during winter months.

For now, natural gas prices remain extremely low, although a sudden bout of cold weather or a supply interruption, like a hurricane in the Gulf of Mexico, could send prices sharply higher.