Investors honing in on US economic data
Sunday, 4 November 2007
NEW YORK, Nov 3 (AP): Prospects for a year-end rally dimmed this past week right along with the chances of another interest rate cut, and that has investors wondering if the bull market can be saved.
Investors enter November with some considerable doubts about corporate earnings, inflation, the continuing credit turmoil, the Federal Reserve's next move, and whether the US might plunge into a recession. All this hangs over the stock market, which has been at best fragile this year.
The quarter-point cut wasn't enough to satisfy Wall Street, which wants to see further reductions to help stimulate everything from cheaper loans to corporate borrowing. And, the Fed's inclination that it might not lower rates again this year sent the Dow Jones industrial average tumbling 1.5 per cent this past week.
The tug-of-war between Wall Street and the Fed has individual investors wondering whether this past week's market decline was a temporary shakeup or a signal to re-evaluate stocks altogether. Most people aren't expecting a worst-case scenario, but some observers say economic data will be a key to determining the market's direction.
"It is almost futile to try and watch everything because this is going to become a data driven market again," said Chris Johnson, president of Johnson Research Group. "Before we were waiting for what the Fed was doing, but now all of a sudden that safety net is gone."
Investors enter November with some considerable doubts about corporate earnings, inflation, the continuing credit turmoil, the Federal Reserve's next move, and whether the US might plunge into a recession. All this hangs over the stock market, which has been at best fragile this year.
The quarter-point cut wasn't enough to satisfy Wall Street, which wants to see further reductions to help stimulate everything from cheaper loans to corporate borrowing. And, the Fed's inclination that it might not lower rates again this year sent the Dow Jones industrial average tumbling 1.5 per cent this past week.
The tug-of-war between Wall Street and the Fed has individual investors wondering whether this past week's market decline was a temporary shakeup or a signal to re-evaluate stocks altogether. Most people aren't expecting a worst-case scenario, but some observers say economic data will be a key to determining the market's direction.
"It is almost futile to try and watch everything because this is going to become a data driven market again," said Chris Johnson, president of Johnson Research Group. "Before we were waiting for what the Fed was doing, but now all of a sudden that safety net is gone."