NEW YORK ( TheStreet) -- The French presidential election will get plenty of digital ink on Sunday, but it may not have much of an impact on U.S. markets in the coming week because Wall Street likely has priced in the expected victory of Francois Hollande over Nicolas Sarkozy. What's more likely to roil equities is the drama at the polls in Greece, where the population is frustrated with both the socialist and conservative parties.
"That's why the Greek election is more important for the market, because what you may see is a template in Greece of citizenry just basically saying we don't want this austerity," said Quincy Krosby, Prudential Financial market strategist. Brian Lazorishak, portfolio manager and quantitative analyst at Chase Investment Council, agreed that the market has already factored in a loss by Sarkozy, a development that complicates how the eurozone deals with its sovereign debt troubles because it's not clear how Hollande and German Chancellor Angela Merkel will work together. "I think the French election is something people are talking about a little," Lazorishak said. "I'm not sure what kind of impact that will have on the U.S. markets. Certainly it's having one on Europe." > > Bull or Bear? Vote in Our Poll The major U.S. equity indices just endured their worst week of the year. The big blow came on Friday when the April employment report came in weaker than expected, showing that only 115,000 jobs were created during the month. Investors are worried about a repeat of the last two years when stocks peaked in the spring. The Dow Jones Industrial Average fell 1.46%, or 192.62 points, this week, closing on Friday at 13,035.77. The blue-chip index has risen 6.7% year to date. The S&P 500 dropped 2.21%, or 30.9 points, to close this week at 1,369.08. Year to date, the index has risen 8.86%. The Nasdaq Composite lost 3.49%, or 106.8 points, to close on Friday at 2,956.34. The index has climbed 13.48% year to date. Even though the French election may not weigh very much on the U.S. markets, it will bring Europe back into the forefont of investors' minds after they had a sharper focus this week on US. economic news, Lazorishak added. "If there's nothing better to trade on in the market, it trades on Europe," Lazorishak said, noting that in the absence of meaningful U.S. economic data or earnings, the market's focus will be on Europe. The bigger pieces of economic data next week are the producer price index and the University of Michigan read on consumer sentiment, both of which come out on Friday. The producer price index was flat in March, and the consensus is calling for more of the same in April, according to Thomson Reuters. Last month's consumer sentiment report was revised to 76.4 from the first reading of 75.7. Economists surveyed by Briefing.com expect the survey to tick down to 76.2. Krosby will be watching Thursday's initial jobless claims report, in particular the four-week moving average. She said that, "especially after
Friday's number, you want to see the data get better or get materially weaker to have the Federal Reserve show its hand. We have mixed data right now." Initial jobless claims are anticipated to come in at 365,000, according to Briefing.com. Another area that Krosby will be watching next week is the 10-year and 30-year Treasury bond auctions. She's been keeping an eye on the 10-year yield because "it's disconcerting that the market is going higher, but it's not being confirmed by the 10-year yield. That's telling us that investors still believe the economy is slowing." This week marked the start of trading in May, and the old adage "Sell in May and go away" got lots of play. Krosby thinks that there may be some selling happening in May, but it's a little different this time around. "It's not because of the calendar, but it's more to do with the data," she said. "And it has more to do with the Fed and the notion that things get bad and Bernanke has said the Fed will be more accommodative. It makes it hard to sell in May and go away when the Fed may come in with the June meeting maybe and offer the market more accommodation. You don't want to be out of the market when the Fed is going to be helping to stimulate market activity."