Your investments and the economy

Alexander Paris Sr. of Barrington Hills is president of Barrington Asset Management, ChicagoWhat moved markets last week?"The market was better than I would have expected, given the big drop in the previous week. I think it was that earnings were not as bad as the previous week. The previous week was dominated by mostly bank earnings, which were mostly bad. And then a lot of write-offs. Then Caterpillar and some big cyclicals put out some negative comments. This (last) week it was a better mix of earnings and they weren't too bad."Which sectors did the best?"Particularly tech stocks tended to move the market. And then there was less good news on Wednesday and Thursday. Then the market backed off a little bit. The other thing is, the market began again betting a bit on the Fed rate cut. It had fallen in the previous week to odds of 40 percent that they would cut and now, probably, the odds are up to 100 percent that they are going to cut on Halloween. So I think that was helping the market during the week."Will $90 a barrel oil affect the gross domestic product this year?"It will add to the downward pressure on the GDP if it persists. Some of that is psychological."What about economic growth?"Investors were concerned about economic growth. Luckily, it was a very quiet week for economics #8230; Housing sales weren't too bad. New home sales were up a bit but that is, I think, mostly a statistical distortion. But they celebrated a little bit on that. That's pretty much what was driving the market (last) week."What about this week?"It is going to be very challenging #8230; and volatile #8230; because I think investors are concerned a little bit more because of (Federal Reserve Bank chairman Ben) Bernanke's speech about a week ago talking about a slower fourth quarter (gross domestic product) growth. I think they are worrying about that."What will spark the volatility and move markets?"This week you're going to have a huge calendar of economic numbers. One of them is going to be the Fed meeting, and whether they are going to cut rates or not. Sometimes (stocks) go higher the day before that because of the uncertainty. Then at the end of the week, you get the employment report, which is usually the big economic report of the month. People are talking about 85,000 new jobs, from 110,000 last month. I don't see a lot of reasons for an upside surprise. So maybe the odds are you have to watch for a downside surprise."