Market Analysis

Both bonds and stocks improved today in the continued game of chicken, with the bulls on Wall Street claiming that the bears investing in bonds are underestimating medium term economic growth and the bears saying that that expected GDP growth in the 2.6% range doesn't support current stock levels.

There was no economic data on the calendar today.  Below is a recap of the economic calendar for the remainder of the week:

Tuesday, Sept 29

S&P Case-Shiller Home Price Index for July 2009 - recent data suggest the early stages of a housing market recovery with a bottoming of prices.  However, recently analysts have been pointing to a delayed in foreclosures hitting the market due to failed efforts to modify loans.  The Case-Shiller data is dated, so even a positive move in the index may be discounted by the market.

Conference Board Consumer Confidence Index - this index has been improving which has provided support for those who believe the recession is over and consumers will once again begin to spend at levels which will support economic growth.  The last index came out at 54.1 and the consensus estimate for this week's index is a continued improvement to 57.0.  Should this index show a reversal, it could take some wind out of the sails of stock market bulls tomorrow.

State Street Investor Confidence Index - this is a global measure of institutional investor confidence levels based on the % of their portfolios allocated to equities.  Recently this index has been reflecting increasing investor confidence in equities.  The index has a break even point of 100.  At levels below 100, investors are considered to be risk averse.  Last month's index had a value of 122.9.

Wednesday, Sept 30

ADP Employment Report - this report attempts to reflect private sector employment changes.  The data in this report has not always correlated with the Labor Dept's non farm payroll report.

Final estimate Q2 GDP - analysts expect GDP for the 2nd Qtr to be revised down to negative 1.1% to 1.2%.

Institute of Supply Mgmt Chicago Business Survey - this index of business conditions in the Chicago area for bot manufacturing and non-manufacturing firms.  Last month's index jumped from the low 40's which indicate contraction to 50.0 which is a breakeven between contraction and contraction.  Investors will be looking at this index for further signs of a thawing of the recession.  The consenus estimate is for this index to move to 52.0 which would represent expansion.

Thursday, Oct 1

September Personal Income, Spending and PCE Index - Personal income is expected up .1% vs last month no change.  Personal spending is expected up 1.0% vs last month up .2% and the PCE Index (a measure of inflation) is expected up .1% vs last month up .1%.

Initial jobless claims for week ended 9/26 - expected up 5,000

Sept Institute of Supply Mgmt Manufacturing Index - expected 54.0 vs last month 52.9

National Assoc of Realtors  Pending Home index - this index of existing homes on which a contract was signed but not yet closed will be watched closely for continued improvement in the housing sector.

Construction spending - this index tracks construction spending on residential, non-residential and public projects.  Data for August will be released this week.  July' spending was down .2% and August's spending is  expected to be down -.1%.  Non residential and public outlays have been positive but residential construction has pulled the overall level down.

Friday, Oct 2

September Nonfarm Payrolls - expected down 188,000 with the jobless rate climbing to 9.8% vs last month's 9.7%.  Avg hourly earnings are expected up .2% vs last month's up .3%.

August Factory Orders - expected up 1.1% vs last monthup 1.3%.

September Institute of Supply Mgmt Service Sector Index - expected 50.0% vs last month 48.8%.