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Wednesday, October 07, 2015

Thursday: FOMC Minutes, Unemployment Claims

by Calculated Risk on 10/07/2015 08:16:00 PM

Some excerpts on the stock market from Aleksandar Timcenko and Noah Weisberger at Goldman Sachs (this is their view):

After hitting an all-time high in late July, the S&P 500 subsequently declined more than 12% over the following month. This type of price action qualifies as a ‘drawdown’, using the definition developed in this piece. We examine recent global equity price action in the context of past drawdowns, and look at why they occur and what accounts for their severity. Lastly, we discuss the post-drawdown environment.
We find that the size and speed of the recent equity drawdowns are within historical norms; that they are more likely to occur (and more likely to be large) when economic growth is deteriorating, when multiples have increased and when returns have climbed above trend; and that markets tend to revert to their previous trends.

This suggests that, if – as we expect – the macroeconomic picture stabilises, recent equity downturns will slowly and steadily reverse course.
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for 271 thousand initial claims, down from 275 thousand the previous week.

• At 2:00 PM, the Fed will release the FOMC Minutes for the Meeting of September 16-17, 2015