AWARDS

Stocks have been all over the place lately.

The S&P is up 0.7% so far this month. After a lot of volatility in August and September, the S&P 500 index recorded its best October in years. Now the question is whether stocks will gain even more momentum going into the holidays.

It's Thanksgiving this coming week followed by Black Friday, the official kickoff for holiday shopping. The holidays often lead to a last-minute rally. The S&P 500 has gained an average of 3.7% in November and December in the last six years. It's what's called a "Santa Claus rally" between Christmas and the New Year.

All eyes will be on the American shopper. That's because consumers are the main engine behind U.S. economic growth. They've been sending mixed signals though. Many major retailers, such as Walmart (WMT), Macy's (M) and Nordstrom (JWN), are not optimistic about the upcoming holiday season.

But overall, companies that depend on consumers are doing very well this year. The S&P 500's consumer discretionary sector is up 12% so far this year, the best of any sector.

That's because spending habits are changing, experts say.

They're not shopping at the traditional department stores, but they're spending online and on "innovative products," said Lindsey Bell, senior analyst at S&P Capital IQ. She cites Nike, which has been performing well -- as an innovative company.

Amazon, (AMZN, Tech30) the world's largest retailer, backs up Bell's case too. Its stock has doubled in the past 12 months. Home improvement companies Home Depot and Lowe's are also performing well, sparked by an increase in big-ticket purchases by homeowners.

Bell said that even though she's positive about holiday spending, the American consumer isn't "freely spending" yet. "The Great Recession is still fresh in the mind," she said.

Next week, both Tiffany (TIF) and Dollar Tree (DLTR) report their quarterly results, which could give us a window into consumer sentiment at two ends of the spectrum.

Finally, December will be a crucial month for investors.

The European Central Bank meets December 3 and it's expected to pump more cash -- called quantitative easing or QE -- into the European economy while keeping European interest rates near zero. That's expected to help European stocks the way the Fed's bond buyback program boosted U.S. stocks for six years.

The U.S. Federal Reserve meets December 15-16 and it will decide whether to raise its key interest rate for the first time since 2006. Although a rate hike sometimes causes short-term volatility in markets, raising rates off zero would provide certainty, experts say.

"The best present that the Fed can give the markets for the holidays is certainty," said Steve Chiavarone, portfolio manager at Federated Investors. "The Fed moving in December is a positive development for the market."

Chiavarone is confident that "Santa is coming" for markets, and forecasts that the S&P 500 will finish at about 2,200, which would be 5% from where the index currently stands at 2,087.

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Soon the dollar could be worth as much as the euro.

The two currencies are heading toward parity after Mario Draghi, the president of the European Central Bank, dropped yet another strong hint that he is about to pour more money into the European economy.

Speaking at a banking congress in Frankfurt, Draghi said the ECB is ready to act fast to boost Europe's nonexistent inflation. "If we decide that the current trajectory of our policy is not sufficient to achieve our objective, we will do what we must to raise inflation as quickly as possible," he said.

"We will do what we must" is the new "big bazooka." Draghi's dovish remarks sent the euro sinking. It lost 0.5% against the dollar, trading at around $1.07.

Draghi has two options now. He can cut the already negative interest rates even deeper, or extend the bank's money-printing program. The ECB is currently buying 60 billion euros worth of bonds a month.

At the same time, the Federal Reserve is expected to start raising interest rates in the U.S. The first hike in nine years could come as soon as in December.

That means Europe and the Fed will be pulling in opposite directions. The ECB's move, likely to happen on December 3, is likely to weaken the euro and strengthen the dollar, while the Fed could give the dollar even bigger boost on December 16.

The last time the dollar matched the euro in value was 13 years ago. At its peak in July 2008, the euro was worth $1.60. Goldman Sachs analysts say the parity could happen before the end of the year. Others see it coming early next year.

Paul Mortimer-Lee, chief economist at BNP Paribas, said that while the two currencies will head toward parity in December, the euro might get a boost once the ECB and Fed actions take effect.

"So the magic number will have to wait until next year. But we will get there," he added.

The strong dollar makes the price of imported goods cheaper in the United States. It also is advantageous to any Americans traveling abroad. But it could also hit American multinational companies that have overseas operations.

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When Vladimir Putin met with Barack Obama in Turkey on Sunday to discuss the terrorist attacks in Paris, he brought along some photos.

The satellite images showed rows of trucks laden with Islamic State oil stretching into the Syrian horizon, a person familiar with matter said. Putin’s point was that U.S. bombing alone can’t eliminate the vast smuggling network that provides much of the extremist group’s funding.

Obama was already well into a stepped-up campaign against the group’s oil resources and that night U.S. aircraft destroyed 116 tankers hauling crude from seized fields. The raid, the largest of its kind since U.S. military action in Syria started last year, happened to coincide with a new phase of Russia’s assault on the same nexus.

While Obama has publicly refused Putin’s offer to coordinate, their actions have started to align since the downing of a Russian airliner in Egypt and the carnage in France, indicating movement toward a more robust alliance against terrorism.

“After the events in Paris and over the skies of Sinai, the EU and the U.S. are showing greater willingness to support Russia’s idea of forming a common front to fight Islamic State,” Russian Deputy Foreign Minister Sergei Ryabkov told Bloomberg News on Thursday.

In Putin’s meeting with Obama, the Russian president “stressed the need” to step up the fight against Islamic State’s oil business, said his spokesman, Dmitry Peskov, without providing more details.

A united front would be bad news not just for the jihadists, but for everyone they do business with. The U.S. and Russia are both widening their target lists to include the middlemen who help the group make money off illicit oil sales.

While the U.S. has struck refineries and other oil targets held by Islamic State in Syria and Iraq more than 260 times since last summer, only now is it starting to hit links in the chain operated mainly by civilians, according to U.K. research group Chatham House and Washington-based Foreign Reports Inc.

“This is a major escalation,” Foreign Reports Vice President Matthew Reed said. “The big shift is that middlemen are now in the cross hairs. Those are people who are in it for the money, they aren’t true believers and could be scared away from the trade.”

The U.S. is hoping the Paris bloodbath “will galvanize others to do even more” in the effort against terrorism, Defense Secretary Ash Carter said on Tuesday, according to the Pentagon.

Putin is doing just that. This week, Russian warplanes, backed by increased satellite capabilities, started to “free hunt” vehicles illegally transporting fuel in Islamic State areas. They destroyed around 500 trucks over several days, the Defense Ministry said in a statement, without saying exactly when the attacks occurred.

France, too, is preparing to escalate its assault on Islamic State, which has been concentrated on the group’s Syrian stronghold of Raqqa.

French President Francois Hollande said Wednesday that the aircraft carrier Charles de Gaulle had set off from the Mediterranean port of Toulon, boosting the number of jets available for strikes to 48 from 12. Hollande is due to meet his U.S. and Russian counterparts in Washington and Moscow next week to discuss coordinating actions.

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A newly released Islamic State video suggesting America's most populous city is a potential target of attacks such as those in Paris, Mayor Bill de Blasio said on Wednesday. "The people of New York City will not be intimidated," he said. "We understand it is the goal of terrorists to intimidate and disrupt our democratic society. We will not submit to their wishes." He added that there is no "specific and credible threat" against New York City.

Police Commissioner William Bratton agreed with the mayor during an evening news conference by both men outside a police precinct in Times Square, adding that there was nothing new about the video, which he called "hastily produced."

"There is no credible and specific threat against New York City," de Blasio said, encouraging New Yorkers to "go about their business" as normal, while remaining watchful.

Islamic State has claimed credit for Friday's attacks in Paris that killed 129 people in shootings and suicide bombings at a concert hall, restaurants and a soccer stadium in Paris.

The assault on the French capital stirred memories in New York of the Sept. 11, 2001, hijacked plane attacks that felled the World Trade Center's Twin Towers, killing more than 2,600 people.

The Islamic State video, which runs for nearly six minutes, includes a scene that appears to show a suicide bomber making preparations and zipping up a jacket, according to a description provided by SITE Intelligence Group, a Bethesda, Maryland, organization that tracks militant groups.

The clip briefly shows Times Square and Herald Square, two Midtown Manhattan crossroads popular with tourists, and a suicide bomber holding what appears to be a trigger. Most of the footage is scenes of Paris and French President Francois Hollande.

"Footage of New York shown in the ISIS video was taken from a video released by the group in April of this year. So while NYC is, and has been, a target for ISIS, today’s video does not warrant any kind of panic," SITE director Rita Katz said in an email to Reuters.

De Blasio said New York City's police force of 35,000, the country's largest, was working tirelessly to keep the city safe from another attack. "Just in this last week, we've initiated the first wave of our new Critical Response Command, which will grow to 500 officers specifically dedicated to anti-terrorism activities," he said.

The new unit will supplement an existing 1,000-officer counterterrorism program, police said.

The FBI said through a spokeswoman it was aware of news reports about the video and "ongoing terrorist threats to NYC," and would fully investigate.

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