Market Minute With Kenny Polcari: Oct. 3, 2022
|By Kenny Polcari|
Wow, what a week it’s going to be! But before we get into it, let’s take a quick look back at what happened last week.
We saw the markets enter another disaster, with the Dow losing another 500 points on Friday alone in addition to the losses that happened all week long. The S&P 500 is now below the June lows of 3,636 points, closing on Friday at 3,585 points, which sets it up for another test lower.
In addition to what’s happening on the home front, we’ve got a lot of building global concerns. We’ve got concerns about the U.K. economy, which is about to flip on its head. The Bank of England has now decided to slow down on rate increases to counterbalance the tax cuts that have been proposed by Prime Minister Liz Truss.
This is something that the S&P and Moody’s Analytics think is a disaster. U.K. debt has already started to be downgraded. This is not a good sign.
We’ve also got issues surrounding OPEC, which has been sort of mulling around and considering what to do about the price of oil. It feels like it’s about to announce a million barrels per day in production in the hope of supporting the price of oil.
Plus, there’s Russia annexing parts of Ukraine, causing all kinds of geopolitical turmoil. And on top of all that, we’ve got a Federal Reserve here in the U.S. that remains laser-focused on inflation, maintaining its hawkish and aggressive stance.
In fact, as I detailed in last week’s episode, we heard more than 20 Fed speakers all singing basically the same tune, with the exception of Chicago’s Fed President Charles Evans, who seemed to be wavering a bit on the pace and speed at which the Fed is focused.
On the other hand, Cleveland’s Fed President Loretta Mester — the biggest hawk — came out and said she had every intention of continuing to raise rates even in the face of a recession in this country. As you can imagine, that sent shivers through the market.
Now, let’s get into what’s due this week for economic data. For one, we’re going to get the S&P Global U.S. Manufacturing PMI with expectations of 51.8, leaving it right on the cusp of expansion and neutral — remember, 50 is the neutral line. We’ve also got construction spending, factory orders and durable goods data coming out.
On Wednesday, we’re going to get the ADP National Employment Report; on Thursday, the S&P Global U.S. Services PMI. Get all the details on this incoming data and what else is in store down below.
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To your Wealth & Wisdom,
P.S. Last week, Dr. Martin Weiss and a special guest expert who picked the last big bottom showed members how to spot the NEXT big bottom. Find out how by clicking here.