US Job Market, Europe Crisis, Earnings of Interest in Week Ahead

With analysts warning that the current climate of market uncertainty is far from over, it appears that Wall Street is set to end the month of October on a high, with the Dow recording the greatest October gain ever. Despite the fact that French President Nicolas Sarkozy has been reported as saying that Greece should never have been permitted entrance to the Eurozone in 2001, European authorities have reached an agreement and mapped out a plan to rescue ailing European countries, including Greece, Italy and Spain. This has done much to boost confidence among Wall Street investors who will continue to keep an alert eye on Europe as leaders of nations forming the G-20 gather in Cannes, with the debt crisis a highlight on the agenda for discussion.

In the US, the Federal Reserve will hold a two-day meeting on Tuesday and Wednesday, with interest rates being one of the issues to be addressed. Although it is anticipated that interest rates will hold steady, the meeting will assess the health of the US economy, which may either put fears of a recession to rest, or stir up more anxiety. Moreover, investors will be keen to find out if the Federal Reserve chief Ben Bernanke will make any announcements regarding the possibility of a third spate of bond buying by the government, dubbed QE3, to assist in stimulating the economy. However, if the outlook on the US economy is positive, no matter how slow signs of recovery may be, analysts believe it is unlikely that US authorities will step in with any further intervention.

With the unemployment rate sitting at more than 9 percent since May 2009, the biggest hindrance to economic recovery remains the lack of job opportunities. Friday sees the release of the jobs report, with analysts expecting the unemployment rate to remain at 9.1 percent. Should the jobs report be worse than anticipated, analysts say it could impact negatively on markets and add to fears of another recession. As the final week for reporting of third quarter results, investors can expect reports from News Corp., Starbucks, Mastercard, Time Warner, and Pfizer along with more than 100 S&P 500 companies.