CHESSNOID

The stock market looks like it has a big challenge ahead this coming week. The Asian markets are all struggling so far.

NIKKEI 13,058.33 -544.69 -4.00%

HANG SENG 23,684.37 -647.30 -2.66%

This will usually translate to a negative start for the US markets. How it will end by closing time is anyone’s guess. Lately, the market seems to rally or take a dive in the last trading hour.

According to Bloomberg:

The jobless rate rose to 5 percent from 4.9 percent, according to the median estimate of economists surveyed by Bloomberg News before the Labor Department’s March 7 report. Payrolls probably expanded by 25,000, short of the roughly 100,000 needed to keep pace with increases in the labor force.

Fewer jobs, rising fuel costs and falling property values are causing consumers to lose confidence and limit spending. The slump in demand is prompting factories to cut production, pushing the economy closer to a recession and making it more likely the Federal Reserve will cut interest rates further.

It seems even though the federal reserve keeps lowering interest rates, it is having the opposite effect on the mortgage rates. Lowering rates and printing more money is suppose to loosen credit, but banks with all their losses seem to be scared to lend in a housing bust. I am guessing they don’t want their collateral going down in value. The other effect the lowering of interest rates seems to be pushing the price of crude oil to newer highs. It has been hovering over a $100 a barrel and the longer it stays above that mark, the more established that floor will become.

You know I have already spent my anticipated refund on a new Walmart laptop. Hopefully the rebate checks encourage spending, but in reality most people will use these checks just to pay down already existing debt. This is actually a wise move but will not have the desired effect the White house wants. Let’s see what happens this week. The calendar looks pretty full of government reports to be releeased.

Bloomberg Survey

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Release Period Prior Median
Indicator Date Value Forecast
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ISM Manu Index 3/3 Feb. 50.7 48.0
Productivity QOQ% 3/5 4Q 1.8% 1.8%
Labor Costs QOQ% 3/5 4Q F 2.1% 2.1%
Factory Orders MOM% 3/5 Jan. 2.3% -2.5%
ISM NonManu Index 3/5 Feb. 44.6 47.5
Initial Claims ,000’s 3/6 2-Mar 373 363
Cont. Claims ,000’s 3/6 Feb. 24 2807 2820
Pending Homes MOM% 3/6 Jan. -1.5% -1.0%
Nonfarm Payrolls ,000’s 3/7 Feb. -17 25
Unemploy Rate % 3/7 Feb. 4.9% 5.0%
Manu Payrolls ,000’s 3/7 Feb. -28 -25
Hourly Earnings MOM% 3/7 Feb. 0.2% 0.3%
Hourly Earnings YOY% 3/7 Feb. 3.7% 3.6%
Avg Weekly Hours 3/7 Feb. 33.7 33.7
Cons. Credit $ Blns 3/7 Jan. 4.5 7.0
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