Earnings, Economic News and Mergers To Look At

This week, we've got plenty of economic data to go along with the continuing Q3 earnings season which rages on this week and next before finally beginning to taper off. On Friday we expect the October non-farm payroll report from the Bureau of Labor Statistics (BLS), which comes two days after the Federal Open Market Committee (FOMC) meets to determine U.S. interest rate policy.

Odds are strongly against the Fed raising rates this week, as there is a 70% chance for a quarter-point rate hike at the committee's December meeting. The argument for increasing interest rates has been gaining steam since the Fed passed on raising rates both in July (following Great Britain's tumultuous vote to leave the European Union) and September. But with the U.S. General Election looming a week from tomorrow, the latest excuse to take no action looks baked in the cake.

Before the bell this morning, Personal Income and Spending numbers were released for September. Income rose 0.3% after a downwardly revised -0.1% in August (unchanged previously). Spending rose 0.5%, which was a little heavier than expected. We see inflation levels at 1.7% and the savings rate at 5.7% - neither of which spells any sort of rampant dangers emerging; for a Halloween-day economic report, this one is far from scary.

The market tumbled Friday afternoon following a news report that FBI Director James Comey was re-investigating Democratic presidential candidate Hillary Clinton's email controversy, and traders sold first and asked questions later. Now on Monday morning, we are seeing renewed buying interest with futures in positive territory. Until and/or unless there is damaging evidence against Ms. Clinton related to this latest investigation - again, a week and a day prior to the election - we don't expect the market to sell off in a similar fashion, near-term.

Cross-Industry Mergers Continue

Following last week's bombshell that AT&T T was buying Time Warner TWX for around $85 billion, there is currently a deal in place that General Electric GE is investing $7.4 billion to help create a new entity combining oil and gas concerns with oil services major Baker Hughes BHI . Shareholders at Baker Hughes will receive a one-time special dividend pay-out of $17.50; GE says the deal will be accretive to the bottom line of 4 cents per share by fiscal 2018.

Both stocks are trading up on thew news - GE is +1.4% and BHI +5.4%. With plenty of uncertainty revolving around the global oil and gas picture, this deal does seem to solidify the direction of both powerhouse companies within this very important industry.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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