A big week ahead
by Peter Switzer
So far so good — the Europeans are making the right noises on their debt rescue plan for Greece, the other PIIGS and the banks who bankrolled them on their spending sprees.
On top of that, the US economy is showing that it’s more likely that they will avoid a double dip recession and though the Dow lost a measly 0.18 per cent on Friday, it was up more than two per cent for the week.
As I said — so far, so good.
By the way, my charts guy Lance Lai says there are tentatively good signs with his wriggly lines and he’s starting to get back in, albeit cautiously.
For S&P 500 watchers, the index was down 0.82 per cent to 1155.46. And while the jobs data in the US came in at 103,000 new jobs against the economists’ consensus of 65,000, Fitch’s downgrading of Spain and Italy’s debt ratings stopped Wall Street ending up in the positive.
What’s the outlook for this week? Try this:
- The results of a weekend meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy on the EFSF’s role in the rescue operation for their problem child member countries.
- US public holiday on Monday but earnings season in the USA kicks off over the shortened week.
- Earnings from Alcoa, JPMorgan, Google
- Retail sales and consumer sentiment on Friday
- On the local front we see job ads (Monday), NAB business survey (Tuesday), housing finance and consumer confidence (Wednesday) and unemployment (Thursday).
One interesting possibility is that if the US economy is better than expected, companies will do better than what was tipped. This could create an opportunity for companies to surprise on the better-than-expected side.
So in summary, let me finish the way I started — if Europe keeps improving its rescue plan and the US economy keeps showing positive growth signs and finally US company earnings are better than expected, we could have the seeds for a decent rally.
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Published on: Monday, October 10, 2011
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