EmailThe focus is on the central banks. Tomorrow, the German court will rule on the constitutionality of the European Stability Mechanism. Thursday afternoon, the Fed will release the policy conclusion from its two-day meeting starting tomorrow.
The stock market has been trained to react positively to indications that central banks will provide more liquidity (crank up the printing presses) regardless of whether those actions actually improve economic or earnings trends. Today is no exception: S&P futures indicate a modest up open.
Apple is set to unveil its next big thing (new iPhone) tomorrow. The stock has been volatile in recent days and could have an outsized impact on the overall market today and tomorrow.
Consumer credit, as reported yesterday while the market was open, unexpectedly declined for July. The market didn't pay much attention, and this is a very volatile number on a monthly basis. But the swing the past two months has been very large and this could be a signal that consumers are pulling back more than realized. The Briefing.com model suggests a possible negative number for third quarter real GDP based on a retrenching consumer.
The July trade balance, reported this morning, was little changed from June and has little market implication.
The near-term outlook continues to hinge heavily on central bank actions. The fundamentals may come back into sharp focus at the end of this month as earnings warnings are likely to accelerate ahead of third quarter earnings reports in October.
Founder and Chairman, Briefing.com
