Sunday, January 28, 2007

Big News Week Ahead

Market Action:
Last Friday’s market surprised us a little due to the lack of any recognizable bounce after the downright miserable Thursday.  The early news was pretty good with durable goods orders up 3.1%, nearly the 3.9% that was expected at 3.9%.  Right after the opening bell, December new home sales were reported to be higher than 1.2% expected at 4.8%.  The bulls just didn’t know what to make of this news.

The stock indexes were relatively quiet going into the weekend.  The Dow did manage to dip below that “magic” 12,450 number for a bit during the trading session but couldn’t hold it.    

Federal Reserve Watch:
This week brings the world the first of several FOMC meetings for 2007.  Since there hasn’t been one for a while (December 12th) there is a little buzz now that the Fed won’t raise rates for the foreseeable future.  Well, what do you know!  They must have finally started paying attention to the Wednesday Update, although, we don’t like them agreeing with us all that much.  No, we don’t expect any change this week either and we thought we wanted to be a little contrarian.

The stock market is generally upbeat over the end of the month which is the time frame we are in right now.  We did notice that the last two days of last week didn’t pay much attention to that general rule but we do still have a couple of trading days left this month of January.  To make any difference, the rally in the Dow needs to be substantial in order to negate the drop late last week.  Ok, maybe “substantial” is overstating the case but this bull market thrives on little up days like 20 points or so.

The earnings news doesn’t seem to be holding much sway over the market this season and we expect that to continue into the upcoming week.  There are some big news events that are looming over the market for the week and you can see some of them below.  Of course, we think the big news will be the jobs’ report on Friday morning but there are a lot of items between now and then to create some volatility this week.

Upcoming News Events for the Week:
Some Big items around the first of the month
VISTA Release, long awaited and often delayed—Tuesday
Conference Board Consumer Confidence—Tuesday (not last week)
Fed meeting (FOMC)—Starts Tuesday
FOMC Interest rate news—Wednesday 1:15 CST
Chicago Purchasing Managers Index (PMI)—Wednesday
January ISM Manufacturing Index—Thursday
December pending home sales—Thursday
Drum Roll Please for the January jobs’ report –Friday

Dow Industrials:  12,487.02  -15.54
VIX: 11.13
HUI:  332.53
QQQQ:  43.57
RYVNX:   17.00
RYAIX:  21.45
RYCWX:  35.49
TLT:  86.91
BEGBX:  13.46

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