1. Fed forecast to cut rates by 0.75 percent
With Wall Street on edge over the need for a bailout of financial powerhouse Bears Stearns & Co., policymakers from the Federal Reserve meet Tuesday. On the agenda: interest rates. According to economists at Global Insight, the best bet is a reduction of 0.75 percent in the short-term lending barometer, to 2.25 percent, amid “mounting concerns about the state of the economy and severe pressures in the financial sector.” That would bring it down by 3 percentage points from where it stood last summer.
2. Analysts: Housing freefall nearing end
The housing industry has nowhere to go from here, except up, or so some experts believe. A consensus of analysts says that Tuesday’s report of February housing starts will show only a tiny drop, to a rate of 1 million homes annually.
3. Spring not yet in the air for retailers
With only a few days left before Easter, Wall Street will be keeping a daily watch on numbers from major retailers. So far, sales of spring apparel and other seasonal items appear to be less than stellar. Normally, spending for the holiday helps pull consumers out of the winter doldrums. This will be the earliest Easter since 1913.
4. New drop expected for leading indicators
Watch for Thursday’s report on February leading economic indicators to show a drop of 0.2 percent. The index fell 0.1 percent in January, marking the fourth straight decline and the fifth setback in six months. Much of the blame has been on the struggling construction industry and downbeat surveys of consumer attitudes.
5. Recovery efforts being put in place
For investors in the stock market, recent action has seen steep rallies followed by sharp dips, mostly in response to actions by the Fed. “It is too late to be bearish, and too early to be bullish,” said Bernard Baumohl of the Economic Outlook Group in Princeton, N.J. “At the same time, however, there is a sense that the seeds of a recovery are gradually, slowly being put in place. The Fed has opened the monetary spigot all the way.”
