Five Stock Market Changers to Watch This Week – November 1 2010

Five Stock Market Changers to Watch This Week – November 1 2010

Fed decision: In what will likely be an event covered in financial history books for decades to come, Fed Chief Ben Bernanke and his fellow committee members will announce the latest interest rate policy on Wednesday (2:15 p.m.). No one expects the rate to change from nearly zero, but nearly everyone expects a clear commitment to some level of new “quantitative easing,” that is, massive printing of dollars. If that figure disappoints — or surprises — expect instant reaction on a global scale and in nearly every market, stocks, bonds, commodities, currencies, and so forth, as bets shift. Estimates range from a few hundred billion to $2 trillion over the coming months, so there’s plenty of room for investors to be wrong on this one.

Election Day: There’s almost no reason to read the rest of this week’s items following the Fed event above and U.S. mid-term elections, on Tuesday. After months of complaining about the “anti-business” Obama team, U.S. corporate chieftains are likely to be handed a conciliatory Republican-led House and a strong GOP hand in the Senate, if not outright control of both chambers. The resurgent right promises immediate and serious budget cuts and an end to rising regulation. As for the markets, the question becomes: Have investors overpriced a Republican win, and what happens if the Democrats surprise?

Jobs: Still reading? Well, there is more news to come. On Friday (8:30 a.m.), a number of employment figures — normally market moving — will come out, notably the latest unemployment rate. Only a serious decline would be a shock here.
Personal income: Halloween is gone, Thanksgiving is dead ahead. That means indictors to come are likely to be interpreted in terms of Christmas spending, sure to move the needle for retail stocks. Income and consumption for October (Monday 8:30 a.m.) will begin to push investors toward or away from consumption-sensitive stocks — think electronics, TVs, and clothing — as holiday spending ramps up.

Home sales: Still reading? Really? Okay, the last is pending home sales. This will be interesting because it’s forward-looking, that is, homes under contract but not yet closed (released Friday). It can be read in part as a sign of economic confidence but also of new lending, since many of these contracts were begun as the recent foreclosure scandal took hold.


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