Now that the third quarter has come to a close, market pundits are looking ahead to this year’s final three-month stretch. While October has a reputation of being one of the most volatile months, the fourth quarter overall is often a strong one, as November and December are frequently good months. It appears many market observers are bullish at this point, some saying any downside in October should make a good buying opportunity.

Personal income data and a consumption report were released before the market open today by the Department of Commerce. Consumer spending came in above expectations, having gained 0.6% in August (an increase of 0.4% was expected). Personal income came in slightly below expectations, gaining 0.3% rather than the consensus of plus 0.4%. Market observers say these are good numbers that prove the consumer remains in good shape in spite of troubles in the housing market and in the face of very high oil prices.

The core PCE deflator, an inflation gauge closely watched by the Fed, showed an increase of only 0.1%. While a positive sign for abating inflation, the markets were somewhat rattled by St. Louis Fed President Poole’s comments late in the day that it would be a mistake for markets to bet on more rate cuts.

A regional manufacturer survey – the Chicago PMI – came in above expectations today, showing a value of 54.2 for September (and beating the reading in August of 53.8). Although used to gauge manufacturing activity, the Chicago PMI is a regional assessment, and as thus did not have a strong market-moving effect. It did however calm some of the fears regarding the growing potential for a coming recession. Just today, according to one source, former Federal Reserve Chairman Alan Greenspan made comments on BBC Radio that he currently sees higher odds for a coming recession; however, Greenspan also stated he believed the odds are still relatively low (i.e., less than 50%) at this point.

Key economic data for the week starting October 1, 2007. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	10:00 ISM Manufacturing Index September: 52.5 / 52.9

Wednesday:
	8:15 ADP Survey September: - 53K / 38K 10:00 ISM Non-Manufacturing Index September: 55.0 / 55.8

Thursday:
	10:00 Factory Orders August: -2.5% / 3.7%

Friday:
	8:30 Non-Farm Payrolls September: 100K / -4K Unemployment Rate: 4.7% / 4.6% Average Hourly Earnings: 0.3% / 0.3%

© HGH Associated Press

News Archive (from 7/1/2007 until 9/30/2007)