Seven Things You Should Know 10/16/2009

Seven Things You Should Know
October 16^th 2009

1.  JPMorgan favors emerging markets:  Emerging economies are exiting the crisis relatively unscathed and with improved economic, financial, and fiscal positions versus developed economies. This means medium-term outperformance of their equities, currencies, and credit.  With much of the EM growth impetus emanating from commodity-hungry China, this should be bullish for commodities. (source: JPMorgan Capital Markets)

2.  US Foreclosure filings down for the 2^nd straight month:  Foreclosure filings — including mortgage default notices, house auctions and home repossessions by banks — were reported on 343,638 properties in September, down 4 percent from August, but up 29 percent from the year-earlier month.  (source: RealtyTrac)

3.  “The Dow Jones industrial average, one of the most watched barometers of the financial world, closed above 10,000 points on Wednesday, a milestone of the stock market’s recovery from the depths of the financial crisis.”  (source: The New York Times)

4.  Recession and Jobs:  An 8 month recession ended in the US in November 2001. The unemployment rate in the country rose from 5.6% to 5.9% during the 1-year after the recession ended (source: National Bureau of Economic Research).  

5.  Job Losses and Stocks:  The current unemployment rate in the US is 9.8%. The last time the nation’s unemployment rate was 9.8% or higher was the 1-year period from 7/82 to 6/83. The total return for the S&P 500 in 1982 was +21.6%, followed by a +22.6% gain in 1983 (source: Department of Labor, BTN Research).

6.  Earnings reports next week will include Apple, Bank of NY, Coach, Coca-Cola, Yahoo, Wells Fargo, American Express, AT&T and Microsoft.

7.  PPI (Oct 20^th) and September Existing Home Sales (Oct 23^rd) are on the economic calendar for next week  

Have a great weekend!