Next Week's News Today (Markets and Presidential Debates Collide)

Next Week's News Today is back and we note that given the present market conditions and political fluidity due to the ongoing wrestling match over the Bailout Bill, we see two scenarios developing in news coverage next week....

SCENARIO 1: The Bailout Bill gets passed by the time that the markets open on Monday. The markets and coverage will focus on whether the U.S. breathes a sigh of relief or not. Under this scenario next week's economic reports will easily become news pegs for coverage. It is a worthy question to see how the markets react to personal spending numbers, auto/truck sale data, and unemployment numbers after passing a Bailout Bill. The rest of the coverage will continue to scrutinize the Bailout Bill itself, and shift into focusing on how assets are actually going to be bought and sold. We also suspect under this scenario - should the bill pass and the markets stabilize somewhat - that there will be more political finger pointing by the week's end, perhaps the Sunday papers and talk shows will see that. However, that is contingent on troubled waters receding a bit.

Particularly notable is Thursday's (October 2nd) planned vice presidential debate. Unlike the presidential debates that focus each meeting on one topic (foreign affairs, then domestic matters) all topics are fair game for the vice presidential debate. That means a few different factors will be at play as each VP candidate will have to juggle three balls - look presidential, attack his/her opponent's economic acumen, and not rattle the markets. Should the Bailout Bill pass and the markets seas calm it will allow the candidates to be more aggressive. If that's the case, journalists will rightly look to see how the markets react. The "X" factor, of course, being that tomorrow's presidential debate is now in limbo and under one suggestion it would be moved and replace Thursday's vice presidential debate. IF that were to happen the candidates and moderator would be hard pressed to stick to the planned single focus of foreign policy and national security.

SCENARIO 2: If the Bailout Bill has not passed by Monday the coverage will rightly be on the bill itself, whether the markets are withering under a lack of passage, and competing visions of the bill. Under this scenario if the markets continue to get worse there will be a "the clock is ticking" atmosphere. However, should the markets show patience then it will give more ammunition to the detractors of the bill who will make themselves increasing more available to journalists. The economic reports mentioned in Scenario 1 will still get reported but will not be the news drivers as media outlets will need all available hands to cover the different aspects of the bill and market reaction.

Thursday's debate will still require the vice presidential candidates to juggle three balls of looking presidential while attacking their opponents economic bonafides without actually rattling the economy. However, should the bill still be in limbo the candidates (whether presidential or vice presidential) will not be in a position to be as aggressive and risk looking like they might shake the markets. The political nightmare for any of the candidates is to say something that negatively impacts the markets the following day and wind up having that be the news story for the next media cycle.

As always, notable earnings and economic reports broken down day by day outlined below.:

MONDAY 9/29
Earnings: Circuit City; Walgreen

Economic Reports: Personal Income; Personal Spending


TUESDAY 9/30
Earnings: Pepsi Bottling Group

Economic Reports: Consumer Confidence


WEDNESDAY 10/1
Earnings: Micron Technology Inc.; Mosaic Co.

Economic Reports: Auto & Trucks Sales (for Sept.); Construction Spending (for Aug.); Crude Inventories


THURSDAY 10/2
Earnings: Constellation Brands; Marriott; Matrix Service Co.;

Economic Reports: Initial Claims (for unemployment); Factory Orders

Politics: Vice Presidential Debate - moderated by Gwen Ifill. Format: All topics fair game with 90 second answers and two minute follow-up discussions.


FRIDAY 10/3
Earnings: Cigna Corp.; Family Dollar Stores

Economic Reports: Hourly Earnings (for Sept.); Nonfarm payroll (for Sept.); Unemployment (for Sept.)