Market Hopes to Focus on Jobs, Not Hurricane, in Coming Week
NEW YORK (TheStreet) -- Stocks managed their best weekly performance in two months, even though Federal Reserve Chairman Ben Bernanke focused on fiscal policy instead of stimulus in his highly anticipated speech on Friday.
But with Congress still in recess, the market will likely be focused next week on the government's August jobs report -- unless Hurricane Irene wrecks havoc on Wall Street over the weekend.
Although there was initially disappointment about the lack of stimulus details in Bernanke's speech, stocks rebounded as traders absorbed news that the Federal Open Market Committee will extend its September meeting by a day to fully discuss the tools it has to support the economy.
In addition to acknowledging that temporary and structural issues are dragging on the economy, Bernanke also placed some blame on Washington.> > Bull or Bear? Vote in Our Poll "Without significant policy changes, the finances of the federal government will inevitably spiral out of control, risking severe economic and financial damage," Bernanke said in prepared remarks on Friday. "The country would be well served by a better process for making fiscal decisions," he added. "The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses." Reacting to the speech, Phil Orlando, chief equity market strategist at Federated Investors, said, "I think Bernanke was hoping to achieve two things. First, to reaffirm that economic growth will be better in the second half of the year and into next year -- basically that we're not going to see a double-dip -- and second, I thought he'd take the president and Congress out behind the woodshed, and he really did. He basically said the Fed has done all that it can from a monetary policy standpoint." "He attempted to light a fire under Congress, but it's up to this supercommittee to come together and get this economic malaise behind us," Orlando continued. Ron Weiner, president and CEO of RDM Financial Group, agreed. "Listening to [Philadelphia Federal Reserve Bank President] Charles Plosser and Ben Bernanke's comments this morning, I think they realize that they don't have enough bullets to truly alter the way the economy is going -- it really is a structural problem and is much more on Congress and the president to create an environment that fosters economic growth -- even if just by taking some questions out of the economy," Weiner said.
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