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Daily Market Update – November 30, 2015 (8:00 AM) As quiet and uninteresting as the last week was, this week and the next one may be in a position to more than make up for the lack of any news, excitement or market moves. This week ends with the Employment Situation Report, but before then comes what may be a very contentious OPEC meeting and about 10 speeches coming from Federal Reserve Governors, including two from Janet Yellen and one from Stanley Fischer. All of those come before next week’s FOMC meeting, which is then followed by a Janet Yellen press conference. So this promises to be an event filled week. The OPEC meeting is thought to be one that’s going to put even more downward pressure on price and we’ve learned that during this cycle that has meant exactly the opposite of what it has meant in other times. This time around when energy prices go down, so has the stock market. Instead of seeing lower energy prices as a gift and trading ahead in discounting the future, as the market has always been purported to do, the market has looked at the here and now and seen low prices as a reflection of a faltering worldwide economy. On the other hand, the picture here in the United States is trying to decide whether the economy is sufficiently in recovery and on a path to continue the kind of growth that last week’s revised GDP indicated. The biggest news is likely to come from Friday’s Employment SItuation Report which would be expected to run somewhat in parallel to news of increased consumer spending that the GDP has been indicating. A good number is likely to solidify the odds of an interest rate increase being announced next week. A disappointing number is likely to add more confusion to the equation, but the handwriting still seems to be on the wall regarding that rate increase. The expectation has become that the FOMC will announce an interest rate increase, regardless of what the data may suggest, as the very idea of being “data driven” may have been a hoax. A good number would likely be met with investor optimism, while a poor number is likely to result in a sell-off, as no one likes the uncertainty that would be associated with such conflicting data. The pre-opening futures are indicating a mild move higher to begin the week. I’d like to see some weakness instead, having only 2 expiring positions this week at risk of not being assigned, in the event of a sell-off. With an unusually large number of ex-dividend positions this week, I’m not as concerned about not making any income generating trades this week, however, I might like to take some advantage of the ex-dividend dates and perhaps adding to those positions. With some weakness I wouldn’t mind dipping into cash reserves that grew with last week’s 3 assignments. While I’d like to see some broad weakness, I’m really more interested in seeing a decline in a handful of stocks that I’ve recently owned over and over and wouldn’t mind adding another “over” or two to the list. In the event that the market shows strength this week, I’m likely to be a fairly passive observer, then only looking for opportunities associated with the 2 expiring positions and holding onto cash. |
