Volatile week ahead

[Bubblesitter]

It is shaping up to be a wild ride on Wall street next week. A couple of interesting events are occurring.

1. Fed meeting on Tues. The market has probably already priced in a Fed funds rate cut of 1/4 point, anything else would probably be a surprise.

2. Big Wall Street houses are reporting earnings. Most analysts are expecting a big hit on profits. Their severity or mildness will be a source of volatility.

3. Triple witching hour on Friday with expiration of multiple options and future contracts. In the past, this has resulted in wild swings in market.

September has always been the most volatile month on Wall Street.

I’m watching this with a bit of detached fascination. I’m currently nearly completely out of stocks with exception of some oil industry shares/funds. My portfolio nearly consists entirely of Gold (ETFs), CDs (short term at FDIC institutions), and Govt Treasuries.

Bubblesitter

[Arty]

Are majority of hedge funds’ earnings also due? Just curious.

[eyePod]

Doesn’t seem much related to real estate.

[CAwireman]

Bubblesitter,

Good point.

Question – is there a calendar of Wallstreet events?
The September look ahead is good. But, I would guess
there is an annual playbook that would be good to
be aware of.

Anyone have a link to something like that?

HiggyBaby

[Bubblesitter]

Eye-pod, Are you living on Mars?

Wall Street and the real estate market are intricately linked. The credit squeeze and liquidity crunch on Wall Street is having a direct impact impact on the real estate market. Sometimes this impact can be immediate.

Who do you think was packaging, selling all those Mortgage backed securities and Mortgage credit derivatives? Why do you think rates on jumbos went jumped recently, resulting in further squeeze on the housing market? Those big banks reporting earnings will be a bell weather on how the mortgage meltdown has impacted them. MBS investors will be further risk averse if news looks bad. Who will buy the home loans? Countrywide certainly can’t hold them on the books.

Your adjustable mortgage rates are likely linked to LIBOR. The treasury yields generally track closely to the 30yr fixed mortgage rates. A flight to safety with people dumping shares results in lower treasury yields.

Most of the recent Wall Street volatility is linked very closely with the problems in housing.

Bubblesitter

[lindismith]

so a 1/4 point, huh?

isn’t that just postponing the inevitable?

BTW, Chrisscoreboard emailed my Friday – said he was exiting the market. Check out http://iamafuturestrader.blogspot.com/

[HereWeGo]

Has the market priced in a 1/4 pt cut or a 1/2 pt cut?

The real key is the IB/broker earnings. Lehman reports before open Tues, Bear and Goldman on Thurs. CR’s reporting of apparently broken deals may be of some concern as well.

Oh, and there can always be those crazy out-of-the-blue events. Wow, that was quick.

It’s going to be an interesting week, that’s for sure. I wouldn’t be surprised if the market finished above 13,650, and I wouldn’t be surprised if it finished below in the 12,900-13,000 range.

[davidt1]

“Question – is there a calendar of Wallstreet events?
The September look ahead is good. But, I would guess
there is an annual playbook that would be good to
be aware of.

Anyone have a link to something like that?”

http://biz.yahoo.com/research/earncal/today.html

This page has everything you could ever want: earnings; splits; IPO; Economic; etc.

[hipmatt]

I agree with bubbles.. I think that there will be drama one way or the other. I expect big swings, in what direction, I don’t know. In the long term I’m bearish, but with all the cry babies on wall street getting their rate cut, I can’t count out a rally. Either way, I am expecting the dollar to fall this week, and gold to rise.

eye-pod… sorry but this post is very relevant to this site.

[Bubblesitter]

Big 300+ point jump in market shows that market was really expecting a 1/4 point.

Earnings so far have not been disastrous. Wall street is holding up well. Volatility will probably be around for a while as this whole credit crunch plays out.

We may already be in recession. There is usually a lag in when economists can actually identify the start of recession.

Bubblesitter

[lniles]

Bloomberg has a good economic calendar:

http://www.bloomberg.com/markets/ecalendar/index.html

So does briefing.com:

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[lendingbubblecontinues]

lindismith posted:

“BTW, Chrisscoreboard emailed my Friday – said he was exiting the market. Check out http://iamafuturestrader.blogspot.com/”

Nice call there Chris!!

[CarlsbadMtnBiker]

Hey Goldsitter, u did good there but you today u lost $$ .. on equities, ..buy and hold baby .. always !

[lindismith]

ok, so definitely not what most of us thought: an extra 1/4 point cut. And e-trade and lehman are having a tough time….

so what’s next???? Who still has to report earnings???

[Bubblesitter]

Gotta love Goldman Sachs

These guys have been able to hedge their big losses due Mortgage backed securities by shorting Mortgage related securities. These guys new all along that the MBS house of cards was gonna collapse some day. Bravo, well played. Other firms weren’t as savvy.

http://money.cnn.com/2007/09/20/magazines/fortune/eavis_goldman.fortune/index.htm?postversion=2007092017

Bubblesitter

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