WALL STREET WEEK AHEAD
WITH the blow from the 5 August credit rating downgrade behind them, investors will focus on the outlook for the US economy as well as signs that European policymakers may be able to contain the Eurozone debt crisis.
Widespread investor panic put the market on a rollercoaster ride last week, with steep losses followed by nearly-as-steep gains in high-volume trading. It was the busiest week for volume since October 2008.
Though investors are still searching for a bottom in the sell off that has taken the benchmark Standard & Poor’s index down 12.4 per cent since 22 July, indexes rose both Thursday and Friday – the index’s first two-day rally since mid-July – and volatility eased.
The move could set stocks up for a calmer week this week, especially if economic data shows the United States is not headed for another recession, strategists said.
“Every bit of data that shows the economy not slipping into recession is going to be the basis for the market to begin to calm down in the weeks ahead,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
While Wall Street stocks ended higher on Friday, the market fell for the week. The Dow fell 1.5 per cent and the Nasdaq lost 1 per cent. The S&P 500 fell on 11 of the past 15 days.
Housing and manufacturing reports are among indicators on tap this week, including the New York and Philadelphia Federal Reserve regional manufacturing surveys and existing home sales.