A Look Ahead: Next Week's Market-Moving Events

By Oliver Pursche  NOV 09, 2012 4:47 PM

Focus on market data, not market reaction.

 


MINYANVILLE ORIGINAL Markets reacted with disappointment over election results and responded to grave concerns over an increased risk of the US falling off the fiscal cliff this week. In spite of the sharp sell-off on Wednesday and Thursday, the S&P 500 (INDEXSP:.INX) lost a little more than 2% (open Monday at 1414 / close Friday at 1383) – well within normal market behavior patterns.
 
Next weeks’ market-moving events:
The Trade: Given markets' anxiety of the US facing the fiscal cliff, I believe that investors are likely to overreact to any further negative news from Europe or elsewhere in the world. Improving US and global economic data is currently being ignored by investors, meaning that an eventual rebound could be more pronounced. I continue to believe that a sector rotation into defensive and lower beta sectors is warranted, but warn against the temptation to engage in market timing activities

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No positions in stocks mentioned.