Default Averted: So What’s Next?
With the government shenanigans finally over (for the time being), it’s time to consider what the next big market moving catalysts could be. For at least two months, we should be able to safely assume the government won’t shut down and the US won’t default on its debt.
Still, there’s plenty going on. Let’s take a closer look…
Of course, it doesn’t make sense to discuss any potential market moving events without talking about the Fed. The markets will go back to analyzing every word that comes out of the Federal Reserve for clues on when the central bank may begin tapering bond purchases.
Has the economy been damaged enough by the shutdown to push tapering to 2014? Will economic data even make sense after 16 days of government closures? How will Yellen impact the tapering decisions?
As you can see, there are several variables which could play into the Fed’s decision. No doubt, investors will be watching all the factors closely and the market will react with each bit of news.
In the meantime, investors will have their hands full studying all the earnings reports being released in the coming weeks.
We’ve had roughly two weeks of earnings to digest, but many of the biggest names have yet to report. This week is when many of the heaviest hitters come out. And, you can be sure the markets will be following key earnings reports very closely.
Another factor to consider is the approach of the holiday season. Believe it or not, the winter holidays are just around the corner.
We’ll start to get reports on things like retail sales, shopping traffic, and consumer demand. How this holiday season shapes up will tell us not only how healthy the economy is, but also if the shutdown has had any lingering effects on spending.
Finally, there are still several international variables to consider.
Is Europe coming out of its recession? Will the ECB keep rates low? How is China’s economy doing? How are negotiations progressing with Iran and Syria? You get the point… there’s a lot to think about overseas as well.
Bottom line, the recent government debacle is through for now, but investors have plenty to pay attention to. Don’t let it all overwhelm you – the best thing to do is stay current with the major financial headlines.
And if you only have time to do the minimum amount of headline watching, just make sure you pay attention to what the Fed is doing.
Yours in Profit,
Gordon Lewis
Category: Stocks
