This quarter will probably prove to be a decisive period in the stock market. The Presidential election is around the corner. What appeared to be a foregone conclusion is now suddenly up in the air. Uncertainty about who the next President will be has increased due to Obama’s poor debate showing. Strangely enough the market seems to like either outcome, Obama or Romney. The S&P 500 is within striking distance of making an all time high! That will be a big, gigantic headline. After a decade of retracing the gains lost from the heights of 2000, we are about to break through. The magic number on the S&P 500 is 1549.35 closing high and 1576.09 intra day, about 111 points from Friday’s closing price of 1460.93.
Earnings season starts Tuesday afterhours with Alcoa. Given that it is a global firm, and there is clearly softening in most economies outside the US, then earnings may start on the wrong foot. Alcoa is a terrible bellwether for the rest of Corporate America. I truly wish someone else would kick off earnings season each year.