The news flow will turn positive next week if...

09/22/2011 1:42 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

If, if, if. I can see a turn in the news flow next week, just as I’ve been writing about here since the beginning of September (for example see my September 6 post “September is the cruelest month” http://jubakpicks.com/2011/09/06/september-is-the-cruelest-month-the-news-flow-from-europe-will-keep-markets-on-edge/ )

If…

If the negotiators return to Athens next week. There won’t be any new money for Greece, until the negotiators from the International Monetary Fund, the European Union, and the European Central Bank are sitting across the table from Greek Prime Minister George Papandreou and Greek Finance Minister Evangelos Venizelos. And without the cash the Greek government won’t be able to pay pensions and salaries. The return of the negotiators would remove much of the fear—temporarily—of an immediate Greek default.

If U.S. economic data set for release on September 28 and September 30 don’t show the economy falling off a cliff. I’m not looking for good news out of the durables orders figures scheduled for release on Wednesday, September 28, or the consumer spending data set for release on Friday, September 30. But anything short of the end of the world would be an improvement on the gloom set of by the Federal Reserve’s September 21 statement of “significant downside risk” on the U.S. economy.

If the Bundestag votes to approve the expanded powers for the European Financial Stability Facility included in the July agreement among the 17 euro nations. The vote is scheduled for September 29. In a September 21 trial vote in the Bundestag’s finance committee the measure passed with a large majority. German approval would move the European Financial Stability Facility a huge step closer (Finland would still remain as a serious but surmountable obstacle) to be able to intervene in the financial markets to support Italian debt and to build a wall around any Greek collapse.

And don’t forget that third-quarter earnings season starts officially with the October 11 report from Alcoa (AA). Earnings will be better than the current extreme gloom suggests and that in itself will distract the financial markets from the current worries.

Notice, I’m not saying that this October news really solves any of the problems now confronting the financial markets. I am saying that financial markets could get a good bounce from the end of the negative woes of September and the switch to the better news of October.

 

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