This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Coming Week: Searching for Sanity

Investors expect another volatile set of trading sessions next week, as they keep their sights pinned on decisions emerging from Washington and clues about how poorly the economy is faring.

Last week brought several trading days of bottom-searching and dead-cat bounces, as the Dow Jones Industrial Average traveled in a range of 1,265 points, from its high end to the low. The bears ultimately won, and the index closed out the week with a loss of more than 440 points, or 5%.

Several regulatory factors may come into play next week, as lawmakers grapple with how to handle the fate of troubled automakers GM (GM), Ford (F) and Chrysler, and the Federal Reserve considers even further cuts to its key rate target.

The Fed embarked on a massive rate-cutting campaign last year, but held off over the summer as inflation surged amid rising commodity prices. Now that crude oil and other commodities have come down tremendously, deflation is the concern, making further interest-rate cuts a more palatable option.

That is especially true since interest rates for consumer loans, whether on mortgages or credit cards, have remained stubbornly high.

"Oh yeah, without a doubt," says Kevin Shacknofsky, co-portfolio manager of the Alpine Dynamic Dividend Fund, when asked whether the Fed is likely to slash its rate further from the current 1% target. "We're going to get further cuts until we get to zero."

Two key indicators next week will provide evidence of whether the economy is officially in a deflationary setting yet. The producer price index will be released by the Commerce Department on Tuesday, followed by the consumer price index on Wednesday.

Housing starts to be released on Wednesday may also give clues about how hard homebuilders are working to correct drastically high inventory levels, though Shacknofsky notes that housing data are seasonal, with the market placing more emphasis on what happens in the spring.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs