WOW! Federal Reserve Chairman Ben Bernanke spoke on 60 Minutes Sunday night and expressed his deep concerns regarding our economy and current unemployment situation. He noted that while inflation is currently low, it is "close to the range where prices would actually start falling..." That's deflation and that is what happened in the Great Depression." Chairman Bernanke believes we would need a Gross Domestic Product growth of at a minimum 2.5% to get unemployment to stabilize.
With the above mentioned doom and gloom, the stock market continues to move higher. In my humble opinion, I believe this is so that as the year ends the stock brokers and fund managers look decent to the public. There is very little in the way of actual reporting this week to drive the markets in either direction.
Moving along to the rest of the week:
Tuesday: The release of Consumer Credit. Last month showed the first increase of outstanding credit in 2010. The consensus is for either a small rise or a small decrease - but nothing significant.
Thursday: The Weekly Unemployment figures. The consensus is for the weekly claims to fall 10,000 to 426,000. The less volatile 4 week moving average is expected to fall from 4.27 million to 4.25 million.
Wholesale Trade: Inventories are anticipated to rise 0.9% after a 1.5% increase in September. Sales are expected to rise 0.6% after last month's 0.4% gain. The past 3 months have given rise to a 4.3% increase in inventories, which is the fastest three month growth rate in the history of the report.
Friday: Consumer Sentiment is expected to rise slightly from 71.6 to 72.5. Consumers apparently feel wealthier if the stock market rises.
While all of the above has an impact on the stock and bond market, I continue to watch the price of gasoline. While seen by some as "inflationary," I see it as another unwanted tax.
The interest rate market remains very volatile, and I can guarantee one thing about rates - they will change. If you are shopping for a home and the payment meets your current budget needs I would suggest you lock it in and stop looking at rates.
Happy Shopping.
Comments(1)