(By Rich Bieglmeier) Now what? The Federal Reserve is going to keep on twisting through 2012, and that's it until August 1 for Benny and the Inkjets. The Chairman could intervene between FOMC meetings; however, iStock's believes it would be seen as a panic move and could cause more harm than good. The stuff would have to be in the fan already.
In his assessment of the economy, Mr. Bernanke said to expect a slowdown in GDP growth to between 1.9% and 2.4% from previous projections of as high as 2.9%. We'll be lucky to see 2 anything. Furthermore, the central bank upped unemployment forecasts to 8% - 8.2% from 7.8% by year's end - such a cheery guy, that Ben Bernanke.
Guess it is time to start paying attention to those dreary economic reports, again. We get another taste Thursday morning with Jobless Claims. Wall Street anticipates 383,000 newbies. Most jobs reports have come in underwater; iStock expects more of the same before the morning bell.
At 10 am Eastern, we'll get Existing Home Sales and the Philadelphia Fed Survey. We all know housing stinks; the only real surprises can come from the upside. So, we will be watching the Philly Fed to see if it mirrors the Empire State manufacturing results, which were way off the mark. If Philly follows, then iStock believes we will see weak Durable Goods Order results next week.
Where does that put the stock market? Well, typesetter Ben continues to hold the carrot right off the noses of Wall Street. "If things get bad enough, I swear Imma gonna do something." The worse the news gets, the more computer models will believe free digital money manna will fall from the skies. Why use up the cash cow, when you can milk stocks higher by suggestion?
As for Europe, the Telegraph reports "European leaders are poised to announce a £600 billion (750 billion euros) deal to bail out Spain and Italy." For now, the money, money, money, should move the two countries out of the headlines for a while. The Greek elections are over, and the EU has said it will ease the terms of the bailout to help foster "growth."
A lot of investors' worries have been temporarily taken off the table. Does that mean equities are done climbing the wall? Maybe, maybe not. iStock wants to see how the indexes opens on Thursday.
On Tuesday, the NASDAQ gapped up at the open. On Wednesday, the index traded within Tuesday's range. If the NASDAQ gaps down towards 2900ish at the open on the 21st, it could create an island reversal, meaning the previous downtrend continues. On the other hand, if the NASDAQ can close on top of 2,942, then Tuesday's pop at the bell is more likely to be a breakaway gap, which means stocks are headed higher.
We will be watching.