The U.S. central bank surprised investors by announcing that it had no plans to curtail any of its unprecedented bond purchases, which were put in place following the 2008 financial crisis. Stocks and commodities soared mid-week on the news, but had given back a big chunk of those gains by Friday.
For the last few months, the focus has been on whether the Fed would begin tapering its stimulus, and by how much. The anticipation had been that it was going to happen this month amid signs of an improving economy. But Fed chairman Ben Bernanke said he was still not convinced that the economy would be okay if the bank pulled back.
Now that there's some breathing room, investors will have to figure out what they should pay attention to until the next Fed meeting in October.
"The market now is sitting around saying, 'OK so now what? What do we have to focus on?'" said Allan Small, a senior investment adviser with DWM Securities. "The market is kind of pausing. It doesn't really know which way to go."
What will be closely watched will be a number of speeches this week by at least 10 members of the Fed, who may hint at when there may be action on the stimulus. If it doesn't happen next month, the next opportunity may be at the following Fed gathering in December.
Attention will also be paid to tech company BlackBerry Ltd., after shares in the smartphone company tumbled significantly last week on news that it was cutting 4,500 jobs and expects to report a quarterly loss of between US$950 and US$995 million. Most of the loss will come from a massive writedown it will take due to poor sales of its new smartphone devices.
BlackBerry also announced it was reducing the number of devices in its portfolio from six to four. Half of the smartphones will be marketed towards higher-end consumers, while the other two will be for entry-level customers. Its second quarterly earnings are due on Friday.
Several key U.S. economic reports will be also released this week, including durable goods orders and new home sales figures. Economists don't expect these numbers to hold any big surprises, but if they do, then they may become fodder for the Fed's tapering deliberations.
"All the numbers play a part. The Fed is watching everything right now. And really, they've said that the economic data will dictate what they do going forward. It all matters," said Small.
"You want to look at it from the standpoint of: Is the U.S. economy continuing to grow and what is the pace of growth? Right now, the pace is modest and that's why the Fed is not reacting."
In Canada, the most anticipated figures will be the retail sales numbers, which come out Tuesday. Bay Street predicts sales rebounded in July with an estimated 0.6 per cent month-over-month gain after a weak June. It's expected this figure will be pumped up by growing demand for automobiles.
Rainy weather in Central Canada may have had some impact on retail sales, but sales of items such as building materials and gardening supplies may have got a boost following the Alberta floods and the end of the Quebec construction strike.
Stocks have also seen some volatility recently due to concerns over Syria, and whether the U.S. will launch missile strikes on the Middle Eastern country in retaliation for an alleged government chemical attack on its own citizens there last month.
But those worries have been alleviated through diplomatic efforts to neutralize Syria's chemical weapons stockpiles.
"We're kind of in that lull before other quarterly earnings reports are released at the end of the month," said Small.
Early on in the week, the markets will also keep an eye out on the results of Sunday's general election in Germany. Last week, polls showed that Chancellor Angela Merkel's centre-right coalition was neck-and-neck with the left-leaning opposition. As change in leadership could spell a new direction in economic policy in Germany, the eurozone's economic powerhouse.