WallStreetWeather.net Forecast For Week Of May 4, 2009

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Summary Of This Week’s Influences:*
Mercury, the planetary energy of communication turns retrograde Thursday until May 30. Information is not as clear and complete as it should be during the three weeks when Mercury is retrograde. Financial markets tend to get choppy and lack direction. Mercury retrograde means it’s time to put the re prefix in front of everything you do (reconfirm, review, repair, reinvent, reconnect, etc). Be sure to backup files and print a copy of your most important documents as computer systems and other electronic devices can be more prone to breakdowns at this time.

The USA was born when Mercury was retrograde which could explain the government’s propensity for making major economic policy decisions during Mercury retrograde periods. The TARP bill passed Congress during Mercury retrograde, and now the results of the stress tests performed on the nation’s 19 largest banks is scheduled to be released after the close on Thursday. Strong interactions during this retrograde period between Mercury and Neptune increase the probability that the results of the stress tests will create more confusion and difficulty discerning the true health of these banks. New policies and actions begun now will likely be revised after May 30 when Mercury begins moving forward again.

Analysts on average expect Friday’s employment report to show a loss of 630,000 jobs in April, less than the 663,000 jobs lost in March. Despite these projections, the unemployment rate is projected to rise from 8.5% to 8.9%. With Mercury retrograde and the Moon (sentiment) in secretive Scorpio Friday you have to wonder if the government’s statistics provide an accurate picture of the situation. Mercury retrograde could bring larger than expected revisions to previous reports.

Fed Chairman Bernanke is scheduled to testify before the Joint Economic Committee Tuesday on the economic outlook. Markets reacted favorably to last Wednesday’s FOMC announcement stating that the pace of economic contraction appears to be slowing. It will be interesting to see if committee members question Bernanke about his role in pushing Bank of America (BAC) to go through with its acquisition of Merrill Lynch.

I wrote in last week’s forecast that I thought the Fed would announce an expansion of its lending programs. Although the statement did not reflect this, two days later the Fed announced starting in June its TALF program will accept CMBS and securities backed by insurance premium finance loans as eligible collateral. The Fed will also extend TALF loans from a three year maturity to five years.

Monday, May 4, 2009
Up but starts to weaken as morning progresses, turning to choppy/mixed to negative in the afternoon.

Tuesday, May 5, 2009
Negative trend bias; improving conditions in afternoon.

Wednesday, May 6, 2009
Choppy/mixed to positive in morning; weakens and turns negative in afternoon.

Thursday, May 7, 2009
Negative followed by a midday turnaround that weakens going into the close.

Friday, May 8, 2009
Negative trend bias, but shows signs of improvement around midday.

*Last week’s summary was cut this week due to time constraints. Look for the Weekly Forecast to be posted earlier than it has been over the last several weeks along with regular blog posts again.

No disclosures.


Anonymous said...

Your absolutly right the number reflected from the department of labor only project those who qualify for unemoplyment NOT those who dont qualify because they quit or got fired or never even filed. I worked their and you can only qualify if its by no fault of your own. Can the real number be over 50%?

Anonymous said...

Hello - could you please do a post on when you think unemployment will get better? Would be nice to have something to look forward to.