November 1, 2010

Midterm Elections and Fed Meets on QE2: Advisor Briefing for the Week of November 1, 2010

There are two big news events this week—the midterm elections on Tuesday and the FOMC meeting that concludes Wednesday—but it’s unclear if the markets have already priced in a Republican election victory and the Fed deciding to embrace a relatively modest QE2.

Greg Valliere, Liz Ann Sonders and Condoleezza Rice all spoke about politics and the markets last week during the Schwab Impact 2010 conference in Boston. We also see the tail end of earnings season, and interest rate decisions by the European Central Bank and the Bank of England.

Monday, Nov. 1 brought the release by the Institute for Supply Management (ISM) of its October manufacturing index, which showed a continued uptick in manufacturing. Reports are also due on personal income and spending as well as construction spending for September. Principal Financial will release quarterly results after the market closes on Monday.

Tuesday, Nov. 2 is midterm Election Day across the nation. Among firms announcing quarterly earnings is NYSE Euronext and The Hartford in the morning, while the Federal Open Market Committee (FOMC) begins the first of two days of meetings. The WTO and the World Bank will conduct a public seminar on the effects of the Doha round of trade talks.

Wednesday, Nov. 3 brings the expected FOMC announcement that it will begin another round of quantitative easing, and automakers will announce their sales for October, while factory orders for September are announced. Prudential Financial is slated to announce its third quarter results. Space shuttle Discovery is scheduled for launch on its final mission.

On Thursday, Nov. 4, the European Central Bank and the Bank of England will announce interest rate decisions, while at home retailers announce same-store sales for October. The government will announce its weekly new unemployment claims and third-quarter productivity.

Friday, Nov. 5 brings the October jobs report from the Labor Dept. at 8:30 a.m. Eastern time. Other economic reports will be released on pending home sales from the National Association of Realtors and consumer credit for September from the Federal Reserve, while an SEC and CFTC joint committee will meet to discuss findings of its May 6 flash crash report.

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