Markets ended Friday with strong gains following a week of turmoil. Investors saw a years worth of profit disappear in a few short days, only to see it stabilize on Thursday and regain slightly at the weeks end. Yahoo Finance editor-in-chief sat down with Yahoo’s own Jeff Macke and Michael Santoli as well as Moody’s Analytics chief economist Mark Zandi and Westwood Capital managing partner Dan Alpert to sort through the wreckage of the week and look ahead towards next week.
Apple (AAPL) will report earnings on Monday, October 20th at 2:00pm. Yahoo Finance senior columnist Michael Santoli expects them to come in at about $1.30 per share, about a 10% gain year-over-year. “They’ve have three months worth of iPhone 6 sales domestically here and China iPhone 6 sales start in China on October 17th. That means they’re going to be able to characterize how the sales went and I do think it’s going to be about looking forward to the December quarter and their sales expectations for the holiday season,” says Santoli.
Don’t call it a Comeback
Last week Yahoo Finance investing host Jeff Macke called that the market would fall lower, a call that turned out to accurate. Now he’s expecting a “Bullard bounce,” based on James Bullard, St. Louis Fed head, saying that the Fed should consider a delay in ending its quantitative easing program.
“Strong rally’s have been launched on less substance in the past,” says Macke. “This is a market where you can kind of put all of the economic news in the back because we’re clearly emotion based right now.”
CPI and Inflation
September CPI data is due out on Wednesday October 22nd at 8:30am. “The big story in the world is global disinflation and deflation,” says Westwood Capital’s Dan Alpert. “The question is what is the U.S. reaction to that?”
In 2013, says Alpert, housing drove almost all of core inflation but that’s been stripped out. “Now that we’ve leveled the wings on the plane the question is whether it’s really flying or are we going to fall into the same deflationary trap that Europe is?”
Mark Zandi of Moody’s analytics is keeping his eyes on consumer confidence in order to truly gage the impact the markets will have on the real economy. He also believes that falling gas prices will help confidence, “it looks like gasoline is going to go below $3 per gallon and that historically has been a real add to confidence,” he says. Still, he’s quick to point out that stock prices are down and Ebola and overseas turmoil make consumer confidence tricky.