Business News

Story of E

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by Peter Switzer

The week ahead on the markets is all about E — Egypt, earnings, employment and economics. And all of this is happening with the US stock market up over 20 per cent since August last year, which is a solid run up.

Even the technical types say we’re in tricky waters with the S&P 500 index in the US having trouble with the level around 1300. It finished on Friday at 1276.34.

Here’s another interesting observation — the S&P 500 index is now only down around 18 per cent since October 2007! So those who might have seen a 50 per cent or so wipe off of their portfolio’s value, are now only 18 per cent under water if they stayed with stocks!

Meanwhile in Australia, our stock market is down around 30 per cent from the high on 1 November 2007.

Disappointing earnings

Now back to the story of E.

To set the scene, many experts think a pullback is on the cards for reasons explained above, and Egyptian protests along with the implications for oil have made gold and other commodities the gut reaction play.

However, helping the US indexes to slide on Friday were some disappointing earnings results from Ford — mostly affected by poor European figures — Amazon and Monster Worldwide.

Earnings this week will be important for the market’s direction, provided the Egyptian authorities settle the street issues wisely.

The big names reporting include ExxonMobil, Chrysler, BP, NewsCorp, Visa, MasterCard and many more that could make or break market expectations.

Watch the data

Then there’s a plethora of economic data with everything from personal income and spending, the Chicago PMI, car sales, ISM manufacturing index, construction spending, the important ADP employment report, chain store sales, jobless claims, factory orders, ISM non-manufacturing index and on Friday there’s the granddaddy of important stats —non-farm payrolls or the jobs report.

Meanwhile Fed boss Ben Bernanke speaks at the National Press Club, and his utterances will be listened to carefully by market players.

Locally the Reserve Bank meets but expect no change in interest rates — you can bet on that! We also get home prices with bubble bursting talk around at the moment, which I think is rubbish, and there’ll be building approvals and the latest trade data.

Big year ahead

But the big news for this week is the start of SWITZER on Sky News Business Channel. After a great break, I’m raring to go and this week I will set the scene for moneymaking for the year ahead. Hope you can join me either at 7pm or 10pm.

Finally how does this SWITZER fact relate to the theme of ‘E’ in this story? Well, that’s simply — the program is EXCELLENT!

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer and Paul Rickard the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.

Published on: Monday, January 31, 2011