Paras Madho is a Director of the Market Watch & Corporate Actions, Global Corporate Client Group for NYSE Euronext (NYSE: NYX). In this...
The economic release schedule for the week of November 19th is as follows:
This week I spoke with Gordon Charlop Ph.D., Managing Director, Rosenblatt Securities, and frequent CNBC commentator, about what he will be watching.
Charlop wonders whether investors are going to buy into the hype surrounding the fiscal cliff. Now the Democrats are considering using Romney’s idea for growth. He said it’s not about taxes or austerity, it’s about stimulus and growing the economy. If you grow the economy it will take care of everything else. The bottom line is, Romney was right to focus on stimulus. Charlop said it’s a three pronged approach, revenues, spending cuts, and the most important part, better growth, and the rest will take care of its self. He is hopeful Washington will work together and rectify our problems, which are correctable. Despite the recent sell-off, he is expecting the markets to trend higher for the remainder of the year, because of a performance squeeze and a lack of options available for investors.
This week there are a number of housing related reports on the docket, including existing home sales, housing market index, housing starts, and MBA purchase applications. Charlop predicts the housing market will begin to positively impact the economy, largely because super storm Sandy has created demand for new housing. While the market is on the mend, he cautions we are not out of the woods yet, although he believes housing has found the bottom, and the trend is pushing upwards. Insurers, reinsurers, utilities, and the government will have a role in the recovery efforts from the recent natural disaster. Home improvement stores, like Lowes and Home Depot will also benefit from the recovery.
Charlop said he hopes cooler heads will prevail between the White House and Congress, and they will both agree and agree to disagree, like the old days of Ronald Reagan and Tip O’Neill. Washington needs to get back to working together and put the country first. He hopes the message everyone got after the elections is, we need a nice moderate approach, and they need do something for the economy. Charlop said “obstruction is not a policy.”
Buzz on the Trading Floor
Traders are concerned that President Obama is not vigorous enough in implementing pro-growth strategies. Charlop believes we have to address our foreign policy strategies and how we will handle the Middle East, including Israel, Iran, Afghanistan, North Africa, and Asia. He said the President needs to get reinvigorated and back to the business of protecting America.
Charlop is shocked and surprised at the destruction caused by Hurricane Sandy on the eastern seaboard of the United States, and concerned about the impact the storm has had on the families affected. He said this is a time for us to pause and reflect. We have to figure out a way for us to improve, and be better prepared to face another crisis like this in the future.