The Greek's Week Ahead - Oct 23

"The Greek's Week Ahead" is designed to help you prepare for the market moving events of the week so you and your portfolio are not caught off guard. Whether it helps you to prepare strategy or just raise your awareness of important factors that may move markets, we hope you find it useful. Driving equity markets this week, we will find a stew of information including a flood of earnings from corporate America, a two-day Federal Open Market Committee Meeting and further economic data.

Monday starts out quiet, with a keen eye on oil. Crude was defiant last Friday after OPEC agreed to a production cut of 1.2 million barrels a day, 20% greater than expectations. North Korea eased off its aggressive stance, and news wires carried stories expressing the North's regret for the reaction of the world. Signs point toward a decreased likelihood of a second test, but we believe that is more likely a strategic decision than a move toward disarmament. Iran remains in the spotlight, and sent a message last week that it would respond to U.N. sanctions in a negative manner. We can expect Iran to once again restrict inspections and possibly consider exiting the NPT. We expect continued sideways movement from the global community and the Persian state until Israel is prepared to act on its own.

On Monday, the Treasury Department will conduct an auction of $7 billion of re-opened Treasury Inflation Protection Securities (TIPS). We expect the market to show anxiety ahead of the FOMC meeting Tuesday. On the corporate earnings calendar, AT&T, Amgen, Ethan Allen Interiors Inc., Ford Motor Company, Halliburton, Netflix and Texas Instruments are among the slew of companies scheduled to report on Monday.

Finally, for the angry mob of Enron victims, former Chief Executive Officer, Jeffrey Skilling faces the knife. He will be sentenced on 19 counts of fraud, conspiracy, insider trading and lying to auditors. However, he's fairing better than Ken Lay...

On Tuesday, the FOMC, the policy making arm of the Federal Reserve, begins its closely watched two-day meeting to discuss interest rates. Last week's inflation-measuring data is likely to bring out hawkish comments from Fed officials, but most economists expect rates to be held in check as a result of the meeting. There seems to be a small possibility of a Fed rate hike of 25 basis points, but this would be a shock to equity markets and send equities down-spiraling. In between meetings, regional Fed chiefs have not been shy about their concern regarding inflation, so that could be viewed as forewarning of a rate hike. Be prepared for that possibility, as we expect it would have a lasting impact on equities over the coming month.

The Treasury will sell $20 billion of two-year notes Tuesday. Across the pond, the European Union Affairs Minister and World Trade Organization head will hold a news conference. The fasting month of Ramadan ends on the Muslim holiday of Eid al-fitr, depending upon the appearance of the new moon. On the earnings front, Altria Group Inc. and Bellsouth Corp. are scheduled to report.

Wednesday brings September existing home sales data, and the market will compare it with new home sales strength shown last week versus the weakness seen in new permits, which may be an indicator that home sales will slow further in the future. Wednesday poses FOMC threat to rates, should the Fed decide to stray from the neutral stance. Also, the Treasury will sell $14 billion of five-year notes on Wednesday.

Thursday, the government releases September data on orders for durable goods. Also, the latest data on new home sales will be released. However, the information seems to pose no threat to move markets, as it follows the FOMC. Headlining the earnings reporting day will be NII Holdings (formerly Nextel), which is seen by the consensus as making $0.41 a share.

New York Fed President Timothy Geithner will speak at a conference on the Japanese economy at the Columbia Business School Center. He is expected to address central banking in the global economy. Finanlly, the WTO is expected to approve Vietnam's entry.

Economic news will hopefully not provide a scary finish to the week. On Friday, the Commerce Department will report third-quarter gross domestic product and the University of Michigan will release its reading on consumer sentiment. Also, Minneapolis Fed head Gary Stern will address the 43rd annual meeting of the Missouri Valley Economic Association.

Finally, the Wharton School will host its 9th annual Wharton Investment Management Conference in Philadelphia. We hope you enjoyed your weekly planner, and look forward to having coffee with you tomorrow, with our publishing of "Today's Morning Coffee."(disclosure)