1. Fed pause likely
A two-day meeting of Federal Reserve policymakers, ending Wednesday, tops the agenda. After 17 rate hikes, members of the central bank stopped tightening the money spigot in August. But some analysts believe there is room for an additional squeeze or two. Chicago economist Carl Tannenbaum believes that, for now, the Fed will stay on hold. Tannenbaum, of LaSalle Bank, said “recent economic data have been mixed, and it is unlikely that Fed Chairman Ben Bernanke will decide to move, in either direction, without conclusive evidence that the economy is resolutely accelerating or dangerously stalling.”
2. Bidding war
It’s turn-up-the-cards time Wednesday for Chicago tycoon Samuel Zell, as another deadline is reached for bidders wanting Equity Office Properties Trust, the biggest U.S. office landlord, which he controls. Vornado Realty Trust may seek to top its $20 billion-plus offer. Last week Blackstone Group came in with a $22.3 billion proposal, or $54 a share. Including debt, it is worth more than $38 billion, the largest-ever private-equity buyout bid.
3. Jobs stay the course
Aside from being Groundhog Day, Friday could provide the first clear-cut evidence of how the economy is performing in 2007. Economist Robert Dederick expects the January employment report to show joblessness flat, at 4.5 percent, with healthy payroll growth of 170,000 new positions. “We had the advantage that the first days of January were unusually warm, and that made a difference for construction workers and others,” said Dederick, of RGD Economics. He said a pickup in manufacturing and home sales indicates the economy “is less fearsome than we feared.”
4. Kraft takes a spin
On Wednesday, watch for Altria Group to announce plans for spinning off Northfield-based Kraft Foods from its tobacco unit, Philip Morris. The move is aimed at boosting Kraft shares, which have trailed some food industry rivals, including Kellogg Co. Kraft, the world’s second-largest foodmaker, has been trimming fat. Last week it agreed to sell its hot-cereal division, including the 114-year-old Cream of Wheat brand, to B&G Foods Inc. for $200 million.
5. Earnings on tap
A slew of fourth-quarter corporate profit reports will roll out, headed by such giants as Allstate, Andrew Corp., Cummins Engine, Corn Products, Pulte Homes, Phelps Dodge and Valero Energy. So far, the quarter is achieving Wall Street’s cherished goal of double-digit earnings growth, with many analysts believing it will be up by 12 percent or 13 percent from a year earlier. Looking ahead, the outlook is getting murkier, but 2007 may see profits advance by 8 percent or 9 percent.
