Turbulence is expected to continue in US markets this week as efforts to settle the budget dispute and debt ceiling issue continues to drag on.
The budget impasse has led to a partial US government shutdown for the past six days, making investors nervous with no resolution in sight.
Over the upcoming weeks the economic sabotage through congressional shutdown would become more evident and may reduce market appetite for risky investments. But the bigger issue markets currently face is the potential risk of default. The Treasury has said US will exhaust its borrowing authority no later than October 17, 2013.
Though chances of a default are slim, there is no denying that the repercussions if it happens could be literally catastrophic and could put a serious dent in the already fragile US economic recovery.
Following are Sentiment charts for S&P 500 (NYSE:SPY), DOW Jones, and NASDAQ (NASDAQ:QQQ).
Following is an economic overview for the week October 7 - 11, 2013.
(All times EST)
Tuesday, October 8
08:30 — Canada Trade Balance:
In July 2013, exports declined by 0.6% and imports grew by 0.6% causing the trade deficit to widen from $460 million in June to $931 million in July.
Wednesday, October 9
04:30 — GB Manufacturing Production:
Monthly update will present annual rate of manufacturing production for August. In July the index increased by 0.2% (Month to Month).
10:30 — Crude Oil Inventories:
EIA (Energy Information Administration) will publish its weekly report on US oil and petroleum inventories for the week ending on October 4, 2013.
14:00 — FOMC Meeting Minutes:
In the September FOMC meeting the Fed surprised the markets by maintaining its bond purchases. In the absence of key economic data and the fiscal dispute in Washington, it is highly unlikely the Federal Reserve will taper its bond purchases in October.
Thursday, October 10
04:00 — ECB Monthly Bulletin:
Monthly report for September will analyze economic changes such as price stability, interest rate decisions, and government debt.
04:00 — BOE Asset Purchase Facility & Official Bank Rate:
Bank of England will announce its basic rate for October 2013. The Monetary Policy Committee will also state of any new changes to its asset purchase pogrom. As of September, BOE kept its rate unchanged at 0.5% and the asset purchase plan at 375 billion.
08:30 — US Unemployment Claims:
Weekly report will refer to changes in initial jobless claims for the week ending on October 4, 2013. Last week jobless claims increased by 1K to reach 308K. This upcoming weekly update may affect the US dollar and consequently commodities and stocks markets.
10:00 — Bank of Japan Governor Kuroda's Speech:
Bank of Japan Governor will deliver a speech the Bretton Woods Committee 2013 International Council Meeting. Considering the recent volatility in Japanese markets, his words could influence investors.
Friday, October 11
08:30 — Canada Employment Change:
In August 2013, unemployment rate declined to 7.1% and the employment increased by 59.2K during the month. The upcoming report might affect the Canadian dollar and consequently commodities prices.
09:55 — Preliminary University of Michigan Consumer Sentiment:
University of Michigan will publish its preliminary consumer sentiment monthly report. The survey could offer information regarding latest shifts in consumer sentiment.
This commentary is for informational purposes only and does not constitute investment advice. The opinions offered herein are not recommendations to buy, sell or hold securities. Market IQ expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.