The next big market thing
by Peter Switzer
Europe has, at least for the moment, stopped spooking stock markets and the European Central Bank’s spend, lend and prosper policy isn’t only helping lower interest rates, it’s actually making stocks look more buyable. So, what should we be watching this week?
The Dow ended off a tad but the S&P 500 and Nasdaq squeezed out small gains for the week. Looking back, the Dow was down 0.04 per cent, the S&P 500 was up 0.28 per cent but for the year this broad index of US share price activity is now up 8.91 per cent. Not bad for two months!
To gauge just how nervous investors are, the VIX or fear index is at 17.21 and that says stocks are back in favour but a big event can quickly change that. So what might do that?
Right now there are some nerves still for Greece and Europe’s resolution of the debt issues, the tension in Iran and what this could do to oil prices and the depth of a European recession. The impact of US gasoline prices and the American consumers are also important but I reckon this week’s job numbers will be the big focus for markets.
Over the week, the Yanks will reveal economic data such as factory orders and the health of the services sector but Friday’s job report will be the big sucker of the week.
Given the Yanks copped the Federal Reserve boss Ben Bernanke pouring cold water on the idea of more quantitative easing, now the US economy has to deliver to justify the central bank’s confidence that economic growth is in the pipeline.
On the local front, it’s huge! We will see job ads, a key inflation gauge, business indicators, trade figures, the Reserve Bank’s (RBA) rate decision on Tuesday and job numbers on Thursday! Did I say this week was huge?
These job figures could confirm or question the wisdom of the RBA’s no cut decision last month, while the US job numbers could hurt or help the current market rally.
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Published on: Monday, March 05, 2012
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