Weekly Outlook
A reversal of Friday’s misfortune, as U.S. stocks enjoyed a bounce back today. The Dow 30 added 286.87 points (+2.18%) to close at 13,468.78. The S+P500 gained 34.61 (+2.42%) to 1,467.67, the NASDAQ added 36.08 (+1.44%) to 2,547.33, and the Russell 2000 gained 10.97 (+1.45%) to 766.39. Volume was slightly ahead of Friday’s sell off.
Tomorrow, the Federal Reserve’s policy committee meets and is expected to hold the Fed-funds target at 5.25%. Obviously, market pros will be looking to see if there is any mention of the sub-prime market mess anywhere in the statement. We don’t expect the Fed to ride to the rescue any time soon. Non-farm payrolls are expected to advance to about a 2% annual growth rate in the second quarter after a 1% first quarter gain. Consumer credit is expected to increase $6B in June after a $12.9B jump in May, as higher energy prices increase revolving credit.
Wednesday is relatively quiet, with wholesale inventories seen rising 0.4% in June. Thursday is the day all large publicly traded companies are due to file their quarterly 10-Qs with the SEC. Wall Street will be scouring the wires looking for any additional financial related casualties that might create further panic. Retailers report their July chain store sales numbers as well.
Friday, the July federal budget deficit is expected to hit $33.2B, and import prices are expected to rise 1.0% in July, but remain flat when gas prices are removed from the equation. We will look forward to show you our Weekly Market Commentary after the close on Friday.
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