WHAT’S ON TAP?
The market is reaching a critical juncture as we approach 10,000 on the Dow and the momentum appears to be waning. A major seasonal trend appears to be taking hold of the housing market and few catalysts appear on the near-term horizon that could push the major averages substantially higher after the incredible rally we’ve seen.
The earnings calendar is very light this week, but the economic calendar is fairly heavy – particularly towards the end of the week.
Monday - no significant news.
Tuesday - No major market moving news other than the Case/Shiller housing data. It will be interesting to see if this data confirms the recent weakness in housing.
ICSC-Goldman Store Sales 7:45 AM ETRedbook 8:55 AM ETS&P Case-Shiller HPI 9:00 AM ETConsumer Confidence 10:00 AM ET
Wednesday – Another relatively slow news day. We get a GDP revision and the meaningless ADP report.
Consumer Confidence 10:00 AM ET
ADP Employment Report 8:15 AM ETGDP 8:30 AM ETChicago PMI 9:45 AM ET
Thursday – The news gets heavy on Thursday. Motor vehicles should see a continued bump from the cash for clunkers program, but already know the September sales are expected to be a disaster. Claims will continue to be an important event. The market will be looking for a reading of 537K. ISM could see another robust reading of well over 50. The market is expecting a very robust 53.5. Pending home sales are likely to reflect to recent weakness we saw in new home sales.
Monster Employment IndexMotor Vehicle SalesPersonal Income and Outlays 8:30 AM ETJobless Claims 8:30 AM ETISM Mfg Index 10:00 AM ETConstruction Spending 10:00 AM ETPending Home Sales Index 10:00 AM ETEIA Natural Gas Report 10:30 AM ET
Friday -The all important employment report comes out Friday. This report should dictate much of the week’s action as trading vie for position heading into the event. Analysts are currently looking for -170K and another jump in the unemployment rate to 9.8%.
Employment Situation 8:30 AM ETFactory Orders 10:00 AM ET
EIA Petroleum Status Report 10:30 AM ET
Hi TPC, near term could push major averages substantially “higher”, no typo here? As you know they came down last 3 days. Housing is seasonally weak, yes? What are the few catalysts to push them higher? Thanks in advance.
Sorry TPC, when I woke up early this morning I must have not read your outlook correctly. I think your outlook is if the averages go higer they will not be much higher than last Thursday’s. My confusion must be do you think it will go lower than Friday’s?
Hi TPC,
What will be the market reaction when “better than expected earnings” are realized once again this quarter?
Even though earnings overall were worse than expected last quarter (and sales were must worse than expected and down 15% versus prior year), important company earnings reports were better than expected last quarter and the market exploded higher. Part of the secret to last quarters reaction was the head and shoulders formation which many thought would lead to a retest and which seems to have resulted in a major short squeeze. It seems that shorts are at the lowest point in a year now. Seems like much less fuel for a major jump, but maybe the fact that so many expect the market to be flat for the rest of the year might just be enough to make the market extremely jumpy, one way or the other.
I can’t see the markets consolidate or correct until we go past 10,000 on the DOW. It could happen this week or next. It will probably be fuelled by over eager shorts, ONCE AGAIN. I wouldn’t recommend getting short right now.