Republicans are likely to take control of the House and possibly
the Senate in the midterm elections Tuesday.
The Fed is expected to launch another round of quantitative
easing next week, purchasing long-term Treasury bonds in an attempt
to push down long-term interest rates further and boost growth.
Data on the October unemployment rate is due next Friday after
auto makers and major retailers report sales figures for the month
on Wednesday and Thursday, respectively.
Midterm Elections May Widen Partisan Gap
Republican victories in the midterm elections Tuesday are likely
to increase the ideological gap between the parties in Congress. In
the House of Representatives, moderate to conservative Democrats
are most likely to be replaced by newcomers, many of whom come from
the tea-party movement and are ideologically to the right of
current officeholders. And the vote could produce a full-blown
caucus of tea-party adherents in the Senate, which will push the
center of gravity among Republicans there to the right.
Meanwhile, President Barack Obama will visit Philadelphia and
Connecticut for last-minute campaigning Saturday and will hold a
rally in Chicago. On Sunday, he goes back to Ohio.
Fed Expected To Start More Treasury Purchases
The Federal Reserve is expected to announce another round of
quantitative easing when its committee that sets a key interest
rate meets Tuesday and Wednesday. According to a Dow Jones
Newswires survey, 11 of the 18 world's biggest banks believe the
Fed will purchase a total of about $1 trillion in bonds during the
course of the program. Six of those surveyed believe total
buying--known as quantitative easing, or QE--will come in anywhere
from about $400 billion to $750 billion.
October Unemployment Rate Likely Flat At 9.6%
The October unemployment rate, to released next Friday, is
expected to be 9.6%, flat with September, according to
Briefing.com. A group of economists polled by the website predicted
the U.S. added 45,000 in the month, compared with the loss of
95,000 jobs the previous month as state governments trimmed
payrolls. That would be the first increase in the number of total
jobs since May. Recent decreases were partly due to the end of
temporary census positions.
New-Vehicle Sales Seen Near 2-Year High In Oct
The U.S. annual sales rate for new vehicles in October will
reach a nearly two-year high, excluding the impact of "Cash for
Clunkers" on results, thanks to a strong response to new models,
according to Edmunds.com. The car-shopping website anticipates the
October seasonally adjusted annualized rate for total auto sales in
the U.S. at about 11.9 million, up from 11.7 million in September.
October sales are expected to be about 920,200 units, up 11% from a
year ago. However, General Motors Co. and Toyota Motor Corp. (TM,
7203.TO) are seen posting declines.
Retailers Will Post October Sales Thursday
Major retailers are scheduled to report October same-store sales
Thursday as they head into the crucial holiday selling season. In
September, most big U.S. chain stores posted monthly sales that
were better than expected. A recent survey of about 9,000 consumers
released by the National Retail Federation trade group showed some
signs that shoppers may loosen their purse strings more than last
year. Overall, those surveyed said they plan to spend an average of
$688.87 this holiday season, up about 1%.
Data On Sept Personal Spending, Income Due
The government will detail personal income and spending figures
for September on Monday along with construction spending for that
month. The Institute for Supply Management is scheduled to report
on October manufacturing activities Monday and on the services
sector Wednesday, when a report on September factory orders also is
due. Preliminary numbers for third-quarter productivity are out
Thursday and for September consumer credit next Friday.
Media Giants Buoyed By Recovering Ad Market
Three major media companies are among those reporting quarterly
results next week along with Dow Jones Industrial Average
components Pfizer Inc. (PFE) and Kraft Foods Inc. (KFT), on Tuesday
and Thursday, respectively, and about 17% of the companies in the
Standard & Poor's 500 Index. The media giants are expected to
post results close to year-earlier figures, although the
advertising market continues to improve from a sharp downturn
during the recession. Time Warner Inc. (TWX) and News Corp. (NWSA)
both report Wednesday, followed by CBS Corp. (CBS, CBSA) a day
later.
Trial To Start In Oracle, SAP Copyright Suit
Oracle Corp. (ORCL) and SAP AG (SAP) square off next week in
Oakland, Calf., in a copyright infringement lawsuit that already
has prompted mudslinging between the business-software giants. The
key issue is how much Germany-based SAP owes Oracle for downloading
parts of its code through its TomorrowNow subsidiary, which has
been closed. SAP admits the wrong-doing but objects to the $2
billion Oracle is seeking in penalties. The trial is scheduled to
begin Monday.
Panel To Discuss Report On 'Flash Crash'
A joint advisory committee to the Securities and Exchange
Commission and Commodity Futures Trading Commission will meet next
Friday to discuss a report on the May 6 "flash crash." The report
pointed to a large trade made by mutual-fund company Waddell &
Reed Financial Inc. as a trigger for the market plunge. The sale
order sparked a plunge in the stock market, causing the Dow Jones
Industrial Average to fall by 700 points in just a few minutes. At
the meeting at CFTC's headquarters in Washington, the committee
will discuss potential regulatory recommendations and responses to
the flash crash.
Clocks In Europe To 'Fall Back' Sunday
European countries will turn back their clocks one hour Sunday
as they leave daylight saving time. Countries in North America will
make the change Nov. 7.
Obama To Depart For India Next Friday
President Obama will begin a four-day trip to India next Friday
as the first leg of a tour of Asia. The visit is expected to focus
on economic relations between the countries, highlighting big
commercial deals for U.S. companies and promoting areas in which
India could offer greater access to American companies and, in
turn, boost U.S. employment. Obama will meet with entrepreneurs and
U.S. executives doing business in India. He also will visit a local
school and hold a town hall with university students. In addition,
Obama will meet with Prime Minister Manmohan Singh and other Indian
officials, address the Parliament and be honored with a state
dinner.
Conferences
Among the significant conferences next week are the EEI
Financial Conference from Sunday through Wednesday in Palm Desert,
Calif.; Credit Suisse Group North American Small Cap Metals &
Mining Conference on Tuesday and Wednesday in New York; Oppenheimer
& Co. Healthcare Conference on Tuesday and Wednesday in New
York; Stifel, Nicolaus & Company Inc. Bank and Thrift
Conference on Tuesday in New York; Dow Jones VentureWire FASTech on
Wednesday and Thursday in Redwood, Calif.; and Goldman Sachs Global
Industrials Conference on Wednesday and Thursday in New York.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
kathy.shwiff@dowjones.com
(Andrew Morse and other Dow Jones Newswires staff contributed to
this report.)
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