The holiday season is long since over and turbulence has returned to the markets. Newspaper Headlines and political policy are once again dominating the market psyche, pushing financial reports and the current earnings season to the sidelines. Welcome to 2010! In this blog we warned weeks ago of the storm clouds that were building over the markets and the thunder began this week with the single biggest weekly drop in the Dow Jones since this bull rally began. Was it weak data or poor earnings that triggered the route? Not at all.  In fact earnings were rather solid. Indeed markets have become rattled with a plethora of political concerns including the health care bill, breaking up and taxing the banks to the re-appointment of Fed Chairman Bernanke.  Fast forward to This coming week which is heavy with even more financial data from GDP to housing starts….littered between some very important corporate earnings reports. As if this wasn’t enough, we will also have our first FOMC meeting for 2010 this week, chaired by a Chairman that may soon be viewed as a lame duck.  While these land mines all threaten to cause even more volatility….the markets will keep a close eye on Wednesday’s state of the Union address. Regardless of investor’s political leanings ( and this blog is not intended to be political), it’s important that traders become aware of the increased influence political headlines and policy have taken these past few weeks. The State of the Union address is always an interesting political speech to watch. In light of investors increased focus on some recent policy statements, this year’s speech could be more of a State of the Markets. Stay tuned

Kevin Riordan

This entry was posted on Friday, January 22nd, 2010 at 10:25 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.