The Greek's Week Ahead - Nov 6

"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.

Last week saw the market retrace ground, as the Dow, S&P 500 and NASDAQ indices all slipped near 1%. The Dow fell below the closely watched 12,000 mark. Economic data headlined the week, raising concern about the slowing economy combined with inflation worries.

The markets seem to want to rebound this week, if stock futures on Monday morning are any indication, but the question remains, how sustainable is any rally and have we reached a near-term bottom after six days of decline in the Dow. Geopolitical instability may have something to say about that this week, as Saddam Hussein was sentenced to death by hanging. Rallies of support are expected across anti-American communities, while ironically, our counterparts in Iran celebrate.

Palestine seems to be near unity, with Hamas and Fatah having created the semblance of a plan to form a unity government. A deal is expected to be consummated later this week with a Mahmoud Abbas trip to Gaza. A few factors in the deal, including the softening of Hamas' stance against the recognition of Israel are not likely to go over well within the generally militant group, and Abbas' visit may not prove to be the key to peace, but the window to civil war. We have concern that certain third-party interests may take initiative, and the representative of peace in Abbas may be downed in fury as a result.

A busy week indeed, and I haven't even touched on the American elections. Democrats threaten to take over Congress on Tuesday, as discontent with the Republican Party's foreign affair efforts may show itself in the election results. Perhaps two years away from a Democratic President and Democratically controlled Congress, the investing community is concerned its tax breaks and tax friendly investing environment could be challenged. Concern also exists that America could abandon Iraq and the Middle East, possibly allowing Iran to develop into a nuclear state and taking the world a step closer to extreme instability. Yes, we do not believe a rally can sustain itself much this week, if even through Monday. Tuesday's results may prove the most important market driver this week, but even a partial victory for Republicans should dim market concern.

On Monday, while Russian markets close for "Unity Day," American markets will be openly concerned about fragmentation, as the Republican control of Congress is threatened. Markets in Columbia and Venezuela will also be closed Monday for All Saints Day.

While generally tense due to the elections and recent economic data, there should not be much market-moving news Monday. Four Federal Reserve presidents are scheduled to speak, and attention will be on them due to recently weak economic data. Comments will be scrutinized carefully, as the market tries to read the level of concern of the Fed, and what action it might take. Chicago Fed head Moskow will address the economic outlook over breakfast. Moskow is already reported to have stated Monday that the Fed may need to raise interest rates further to curb inflation. A keen eye should be reserved for Cleveland President Pianalto, who will address monetary policy Monday. Overseas, the EU Commission will release its autumn economic forecasts for its 25 member nations. In Toronto, The World Hedge Funds summit kicks off.

Reporting earnings on Monday, El Paso Corp., Affiliated Computer, AES Corp., Anadarko Petroleum, Altera Corp., and Fluor Corp. Also, the American Stock Exchange will launch its pilot trading platform, "Auction and Electronic Market Integration."

Tuesday marks election day, and is likely to monopolize the news media and top traders' concerns. One-third of the Senate seats and 435 House positions will be in play.

Heading the economic news front, consumer credit for September is expected by economists surveyed by Bloomberg to increase by $6 billion, after showing $5 billion growth in August. The question we have been juggling with for years is just how far extended can the American consumer get before he goes bust. The rise of interest rates has certainly begun to strain the consumer, and housing defaults and foreclosures are on the rise, but still not at a concerning level.

Reporting earnings on Tuesday, Dean Foods, Emerson Electric, RR Donnelley & Sons, International Game Technologies, Sara Lee Corp., Tenet Healthcare, and Watson Pharma Inc.

On Wednesday, the market will digest the election results and decide on its impact to stocks. We think it would take Democrat victories in both the House and the Senate, for markets to turn decidedly lower. Otherwise, we anticipate a non-impact.

Also on Wednesday, SEC Chairman Christopher Cox and other market notables will headline the SIFMA meeting in Florida. The New York Society of Securities Analysts holds its energy conference on Wednesday. Overseas, Australia's Reserve Bank may impact Asian stocks as it ends its meeting and issues its decision on interest rates.

Reporting earnings Wednesday, look for Cisco Systems Inc., Federated Department Stores, Barr Pharmaceuticals, Dynegy, Hospira, Interpublic Group, PG&E Corp., and BMC Software Inc.

Economic news will decide the day on Thursday, with a couple key indicators scheduled for release. Weekly jobless claims for the week of November 4 is expected to decline to roughly 315,000. The University of Michigan is scheduled to release its consumer sentiment index for November, and economists expect a reading of 93.0, little changed from October. The September International Trade data will be released, and economists see a large decline to a deficit of $66.0 billion from the all-time high of $69.9 billion measured in August. The Bureau of Labor Statistics will release its import-price index. Expectations are for a 1% decrease in import prices in October, versus a 2.1% decrease in September. Something worth being aware of, former Fed Chairman, Alan Greenspan, will speak at the AMR Research conference in Boston.

Overseas, the Bank of England will announce its decision on interest rates. At the White House, the second U.S.-EU Economic Ministerial will take place. Also on Thursday, President Bush will meet with Mexico's president-elect, Felipe Calderon.

Reporting earnings on Thursday, King Pharma, Viacom, J.C. Penney, Nvidia Corp., TXU Corp. Valor Communications, American International Group, Disney, and Kohls Corp.

Friday looks like a quiet day, with earnings season mostly over and the elections a thing of the past. The most significant news of the day may come from Fed Chairman Ben Bernanke, as he speaks at a conference in Frankfurt.

We hope you enjoyed your weekly planner. Check back in with us daily to get your "Morning Coffee," everything you need to start your trading day. (disclosure)