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Investors Prepare for Round 1.5: The Biden-Ryan Debate Hits This Thursday

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Who would have imagined that a veep-off could affect the markets? This year, investors will be watching the vice presidential debate with one eye on stock prices.

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MINYANVILLE ORIGINAL The end of September's market funk was met with a first week of October slam dunk as the Dow (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) tacked on a Phi Slama Jama 1+%. Gold made a little headway, but felt the sharp elbow of a stronger employment rate and the QE-slowing impact it may have.

The big news of last week, the presidential debate, foreshadows this week's big event, the vice presidential debate. Usually relegated to deep undercard status, the veep-off takes on more weight than usual as Americans try to decide how to cast their votes in November. We're hearing the contest is closer than people think, making every debate, economic number, and tie-color selection of utmost importance. This is what it has come to, folks.

Back in stock market land, India's stock market had a nifty nearly 16% drop last Friday, proving that flash crashes -- a.k.a., "providing of liquidity" -- can be exported; China's drooping markets are back from vacation; there's no big fix in the eurozone; the Middle East is middling at best; and Hugo Chavez just won his sixth term in office. In other words, it's business as usual.

Click on the image below for an interactive version of this week's Lloyd's Wall of Worry column, or scroll down for the text-only version. Also see "What is Lloyd's Wall of Worry" below.




QE: Two weeks into QE3 and already the cries and wails for QE4 can be heard from the hallowed streets of Broad, Pine, and Wall.

US ECONOMY: GDP flirting with the +1.0% level. And with a margin of error of, say, 0-2%...uh, you get the drift.

UNEMPLOYMENT: Eurozone rate hits 11.4%. How high is up?

INVESTOR SENTIMENT: See no rally, hear no rally, speak no rally.

HOUSING CRISIS: Housing permits and starts keep rising. Now it's time to start actually building those homes.

EUROPEAN ECONOMY: Last seen on a clipper ship headed to the New World circa 1492.

THE EUROPEAN UNION: Eurozone finance minister meeting this week with news flow from the meeting likely to hit the wires in early November. Eurozone say what!?!

SOVEREIGN DEBT: Looking more appetizing, but not yet edible enough for the ravenous, dividend-chasing, yield-hungry crowd.

SPAIN: One country or two? Catalonia region doing a Texas Two-Step Threat as it dares succession.

VOLATILITY: It's back, but only in small doses -- small, gut-wrenching, ACL-tearing, spinal-piercing doses.

HIGH FREQUENCY TRADING:
Lloyd: Flash crash in India last Friday. Down 15.6% in minutes.
HAL: Never been to India.
Lloyd: Try again.
HAL: I don't even eat Indian food.
Lloyd: Better leave this one to your lobbyist.

CHINA: Party week is over. Back to work and back to saving the world economy... we hope.

STOCK MARKET TECHNICALS: Channel surfing. The markets pinballing up and down within an upward biased channel.

GLOBAL ECONOMY: Would be fine if we could just find a yet unknown Earth continent that's growing its GDP at 10+%.

CONSUMER CONFIDENCE: Gas prices down, confidence levels up. It's just that simple.

US PRESIDENTIAL ELECTION: October surprises busting out all over.

THE MIDDLE EAST: The pin is back in the grenade for the moment. But it's still a grenade.

THE CLIFF: Chances for a lame duck session solution being talked down as the members of Congress display the unique talent of lowering an expectation bar that is already a good three feet below sea level.

GREECE: Merkel coming for a little visit and a little talk and a little threatening...

DURABLE GOODS: This past month's orders, not so durable.

DRAGHI: That magic hat's not empty already, right?

ITALY: More divorce talk in Euroland as Venetians start rallying for independence from the north. I wouldn't want to be the lawyer for either side in this fight.

MONDAYS: "The markets hate Mondays! Stay away from the Mondays!!" – My re-mix homage to a classic quote from The Jerk.

EARNINGS SEASON: Earnings, important. Guidance, priceless.

GOLD: The price shudders from a shot across the bow of the world's oldest currency as the stronger US employment rate may threaten more QE and the golden dual jewels of high inflation and a weak currency it brings with it.

OIL PRICES: Were rising too fast, now dropping too fast.



What Is Lloyd's Wall of Worry?
by Lloyd Khaner

Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.

Typically the term "wall of worry" refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.

This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."

In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
SPY, QQQ, DIA, GLD
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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