Main event: This might not be a very happy week for stockbrokers and others who are waiting for the Federal Reserve Board to take steps to force interest rates lower. The reason: There are fears that there will be a substantial increase in the consumer price index for October, which will be announced Tuesday. A consensus among economists polled last week by Dow Jones News Service found an expectation that prices for the month will be up 0.5 percent, a relatively strong rise. If so, it would heighten pressure on the Fed to leave rates alone. However, economist Richard Peterson of Continental Bank is one of those who thinks there will be a more moderate increase for the month, 0.3 percent. Says Peterson: ”Energy prices may be up a little, food prices should be pretty moderate and we don`t expect to see apparel prices jump up again.”
Alternate view: Donald Ratajczak, director of the economic forecasting project at Georgia State University, sees an increase of 0.6 percent in the key inflation rate. ”The consumer price index may be a little disturbing,” he said. Ratajczak and others at the school conduct a monthly price survey to try to stay ahead of government figures.
Next up: Oil ministers from 11 Arab countries will meet Monday in Abu Dhabi, and may provide some clue where petroleum prices are headed. Their meeting occurs before a gathering Thursday in Vienna by the Organization of Petroleum Exporting Countries. On Wednesday, the Commerce Department reports durable goods orders for October.
More events: The long-awaited groundbreaking for a new airport in Denver takes place Wednesday, with Transportation Secretary Samuel Skinner on hand. Also Wednesday, B.A.T Industries PLC, parent of Chicago-based Marshall Field & Co., releases its third-quarter earnings in London.
Markets: Though there have been complaints that Wall Street can`t generate much enthusiasm, stock prices keep inching forward. Last week the Dow Jones industrial average added 27.05 points to close at 2652.66, the highest level since Oct. 25.
Rally time: Analyst Jack Solomon of Bear, Stearns & Co. sees ”a pretty quick rally coming up” in stock prices. However, he sees technical forces stopping it just as quickly. Once the Dow goes above 2700, there should be ”a good deal of short-covering, forcing prices suddenly higher,” according to Solomon. That effect, though, would cause prices to fizzle around 2740, he said.
Cash shift: Small investors have moved $51 billion out of short-term investments like money market accounts and bank savings accounts this year, says Money magazine. Where has it gone? Mostly into certificates of deposit. The magazine says expectations that interest rates are headed lower is causing quite a few investors to buy 1/2-year CDs, which are yielding around 8.6 percent.
Brew-ha-ha: Coffee producers will gather in Costa Rica this week, to try to stem an uncontrolled freefall in prices. In London futures trading, coffee was unloaded last week for less than 40 cents a pound. The World Bank says coffee producers stand to lose about $4 billion in the next year.
Meetings: The dangers of international leveraged buyouts will be discussed by the Association for Corporate Growth at a luncheon Tuesday in the Metropolitan Club of Sears Tower. Whether to hire independent contractors or add to full-time employees will be discussed Wednesday at a breakfast sponsored by the Management Association of Illinois, 2400 S. Downing Ave., Westchester.
