1. Holiday shopping outlook gloomy
As the holiday shopping season looms, Americans are displaying a long list of worries, headed up by plummeting values for houses. A fresh analysis comes Wednesday, with October retail sales. Most analysts expect a modest gain of 0.2 percent. Economist Carl Tannenbaum is telling clients that worries persist about gasoline topping $3 a gallon, as crude oil has surged by “a startling 50 percent since summer.” Tannenbaum, of LaSalle Bank, says “higher energy costs act as a tax on consumers.” But he adds, “Energy prices have been elevated for the last two years, without inflicting too much damage on the economy.”
2. More rate cuts possible
If holiday shopping does turn out to be a drag, prospects will grow for the Federal Reserve to cut rates by an additional quarter-point when policymakers meet Dec. 11. After they last cut rates on Halloween, members of the Fed made it clear they are worrying about inflation. But their hawkish tone could give way to gentler comments if consumers pull in their horns.
3. Eyes on inflation, prices
Fed members will carefully monitor Wednesday’s report on wholesale inflation and Thursday’s consumer price index, both for October. Most analysts are expecting a gain of 0.3 percent for each report.
4. FDA ‘counter’ proposal
On Wednesday in Washington, the Food and Drug Administration will allow for public comments about a plan to create a new category of “behind-the-counter” drugs that would require consultation with a pharmacist instead of a prescription. Such a change has been proposed because it is used in Europe and elsewhere.
5. No holiday for market
Although Monday is the Veterans Day holiday, the stock market and most businesses will operate normally. After some wild gyrations in recent days, pessimists have begun to declare that Wall Street’s bull market is about over. But Flossmoor investment adviser Richard Evans says the bull market will continue “because the current setback isn’t as severe as the correction in August.”
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wsluis@tribune.com
