Updated from 10/01/11 with news that Greece will miss deficit targetsNEW YORK ( TheStreet) -- A rocky third quarter
Investors are also still waiting for a decision on whether Greece will get its next round of bailout funding. They could be left waiting until Oct. 13, which is essentially the last possible minute officials can stall until the country would default (Debt ceiling lockdown, anyone? Yes, but the Greek version will be far worse). On Oct. 14, two billion euros worth of Greek Treasury bills mature. This weekend Greece still has to cut salaries of its government workers by 20%, another one of the demands by the "troika" of creditors before the country can get its next round of bailout money. Protestors might take to the streets of Athens, again. Meanwhile, officials continue to debate the possibility of levering up the bailout fund so that the facility would be large enough to support the debt of Greece, Portugal, Ireland, Spain and Italy. Economists aren't expecting conclusions anytime soon, but now that the idea is out of the bag, it's likely the markets will only punish policymakers further if the proposal falls flat on its face. On Thursday, the European Central Bank is expected to announce its decision on the key interest rate level and other monetary policy changes. Investors have speculated the central bank could cut the rate after raising it twice this year, although a jump in eurozone inflation in September has cooled some of these hopes. Since the ECB is making an appearance, there's a risk officials could throw cold water on the idea of financing an expanded rescue fund. Remember, the ECB is the only player in all this mess with an unlimited balance sheet. Also next week, research firm Capital Economics expects that eurozone retail spending remained weak and that a slowdown in Germany's industrial production intensified.
Concerns about a housing bubble, slowing investment and manufacturing in China, as well as concerns about local government debt are putting pressure on Chinese stocks, suggesting that the country's once-booming economy might be more at risk for a hard landing. Export-related stocks have been hit especially hard by the global rout, along with the property and manufacturing sectors. Copper, for which China is the world's largest consumer, has tumbled 25% in September alone. The Shanghai Composite Index lost 15% in the third quarter. If economic data out of China rattle investors more, then we could see Wall Street start following Asian markets lower, not the other way around. A small piece of good news: The Shanghai stock exchange is closed all next week in celebration of China's National Day on Oct. 1.
single data points right now anyway. "If there's a positive number, people say that's great. But can we put a string of those together?" says Jim Maguire, a floor trader with NativeOne Institutional Trading. The biggest economic indicator slated for next week is Friday's jobs report for September. The unemployment rate is expected to remain close to 9% for at least the next couple of months by most estimates. Economists expect the end of the Verizon ( VZ) labor strike to provide a small boost to the number of private sector jobs.
Capital Economics, however, estimates the economy probably created no new jobs in total for the second straight month. Amid low levels of business optimism, few have high hopes for a nice surprise by the week's end. Even if the headline payrolls number comes in better than expectations, eurozone worries will probably smother any small upside. If equities tumble more, yields on bonds incredibly may have even further to fall. Already the spread between the 10-year and 30-year yields has reached to its lowest level in more than a year. The Federal Reserve
plans to kick off "Operation Twist" on Monday with the purchase of $2.25 billion to $2.75 billion in 30-year Treasuries, which could push up demand for long-term debt even further. There's a myriad of moving parts that investors need to keep their eyes on next week. Greece's situation is coming to a head, and Italy's clock is bound to start ticking as well. "You have to be prepared to take your daily European beating even if you don't deserve it," said Jim Cramer on Friday's 'Mad Money .' "You have to accept the linkage," he said. "It's just too powerful." -- Written by Chao Deng in New York. >To contact the writer of this article, click here: Chao Deng. >To follow the writer on Twitter, go to: @chao_deng >To submit a news tip, send an email to: firstname.lastname@example.org.