The direction markets take Monday morning will undoubtedly be decided Sunday in Greece, where voters will decide between a pro-austerity party and an anti-austerity party.

The outcome of the election has huge ramifications for Greece, Europe and global markets.

A vote in favor of the anti-austerity Syriza party, whose leaders have vowed to reject budget cuts required as terms of a bailout for the debt-addled nation, could force Greece out of the 17-member eurozone, a move many analysts see as a potential catastrophe.

With funding cut off to Greece, a messy default is inevitable and the contagion will spread quickly to faltering economies in Spain, Italy, Portugal and elsewhere, the thinking goes.

Central banks around the globe have promised to act if necessary in the event the Syriza party emerges victorious in Greece and global markets show signs of panic.

Either way -- a win for austerity or a loss for austerity -- Monday looks to be one of the more interesting days on Wall Street in recent years.

On Tuesday the Federal Reserve Board begins two days of meetings and while no new stimulus programs are expected to be launched, once again investors will looking for signs of how close policy makers are to announcing further intervention.

Interest rates won’t change. Fed board members announced their intentions long ago to keep rates at historic lows until at least 2014 and nothing has happened to shift that policy. To the contrary, a weak labor market in recent months seems to confirm that strategy.

Also a possibility next week (but not likely) is a ruling from the U.S. Supreme Court on whether the individual mandate aspect of the national health reform legislation enacted in 2010 is constitutional. Opponents of the law have sued the administration arguing that the government cannot force individuals to buy insurance or face penalties.

Technology bellwether Oracle (ORCL) is scheduled to release its quarterly earnings report next week, which should offer a glimpse of corporate spending on technology.

Also due next week are earnings from Adobe Systems (ADBE), ConAgra Foods (CAG), FedEx (FDX), Barnes & Noble (BKS) and Discover Financial Services (DFS).

Investors will also be watching a manufacturing report due Thursday from the Federal Reserve Bank of Philadelphia. Manufacturing had remained a lone strength as the rest of the economy weakened during the spring, but even that sector has shown signs of faltering in recent weeks.

On the housing front, a housing market index, the National Association of Homebuilders Housing Market Index, is due Monday; housing starts and permits for May will be reported Tuesday; and sales of existing homes and a gauge of home prices from the Federal Housing Finance Agency Housing are due Thursday.

 

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