December data (payroll, unemployment, ISM) were clearly disappointing as job deterioration raises the risk to consumer spending – a sign that many thinks will force Uncle Ben to act again when the Fed meet next Jan 29th – 30th. And on Thursday the Federal Reserve Chairman pledged to slash interest rates as needed to prevent housing and credit problems from plunging the country into a recession.

Economists now believe the Fed will slice its key interest rate by a bold one-half of a percentage point instead of one-quarter point reduction. Remember when the Fed (Dec 11th 2007) cut the rate by 25 instead of 50 basis point to 4.25 percent as demanded by many and as the consequences the Dow plunged by 344 points? And now the same expectation is building? Bernanke who invited wide criticisms on his approach in tackling the economy issue might succumb to pressure this time around, he’s a nice guy after all compare to his predecessor Alan Greenspan.

Anyway, the earning season started with stock picking becomes more difficult with the gloomy U.S. economy and the hanging post-subprime problem especially with financial institutions still bleeding profusely. The market’s pulse does not show a healthy status and any great earning reports from stocks not related to financial could join the blood-pool if the overall market sentiment for that particular day (heck, or even a trading session) is not good. Next week we’ll see how the sub-prime crisis affect Citigroup Inc.’s (NYSE: C, stock) bottom line. Also we’ll have Intel Corp (Nasdaq: INTC, stock) reporting its earnings on the same day as Citigroup on Tuesday, Jan 15th. Both reports could set the direction for the financial and technology stocks, temporarily.

And don’t forget the much anticipated MacWorld Conference and Expo scheduled on 14th – 18th Jan 2008, that’s next week dude. For all you know, Apple Inc. (Nasdaq: AAPL, stock) could be the saviour of the day.

Other Articles That May Interest You …

• Red all over Wall Street due to Unemployment Data
• What to do during US Economy Slowdown?
• Stocks Threw the Punches – Cut or No Cut

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January 11th, 2008 by financetwitter

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