1. Oil barreling out?
The week’s top topic will be whether the price of oil falls below $50 a barrel–and stays there. If so, the price of a gallon of gas could drop below the magic $2 level. In recent days, petroleum briefly breached the half-century mark before making a modest rebound. It has been hard hit by reports of falling global demand. The price hit a 19-month low, off about 36 percent from its peak last summer. A fresh round of statistics on fuel inventories rolls out Thursday. One analyst says that the price of oil will fall below $47 within two weeks unless the Organization of the Petroleum Exporting Countries calls for a meeting.
2. Fed eyes inflation
With only a matter of days to go before members of the Federal Reserve get together to talk about interest rates, there is heavy betting that the green-eyeshade gang won’t lift a finger. But to keep themselves in the game, central bank policymakers have been talking tough. Last week’s Fed survey of regional economic conditions, known as the beige book, showed slow but steady growth, heightening concerns that inflation is not dead. Members of the central bank gather Jan. 30.
3. Housing’s hazy recovery
Despite numerous cracks in the foundation of the home-construction industry, analysts continue to tell us its downward spiral is ending. Get ready for additional talk about a spring home-building revival, when the Commerce Department reports Friday on new-home sales for December. Last week, a 4.5 percent jump in December housing starts “came out of the blue after 11 straight monthly declines,” said economist Ian Shepherdson of High Frequency Economics, Valhalla, N.Y. However, he added, “it is far from clear whether housing has reached the bottom of a cliff or is on a narrow ledge halfway down.”
4. United ready for takeoff
A lengthy list of corporate profit reports will be headed on Tuesday by UAL Corp., the parent of United Airlines. The Elk Grove Township-based carrier is expected to report results that are solidly in the black, furthering speculation that it soon may merge with another of the industry giants. Other expected profit reports of note: Texas Instruments, Tellabs, Sun Microsystems, Bank of America, and DuPont.
5. Tech’s ho-hum showing
The stock market continues its journey to never-never land, but some disturbing signs appeared last week in the computer sector. Things were so bad a few analysts talked of a “tech wreck.” Earnings shortfalls were reported by Apple Computer, International Business Machines and Motorola, to mention but a few. Additional fourth-quarter profit reports occur in coming days, and analysts still are calling for double-digit earnings growth.
