The President makes a triumphant return to Ground Zero, Wall Street anticipates strong GM earnings and retail sales, while the dollar may fall further on Euro policy. Here's what we're watching…
President Obama to Ground Zero: For the first time since taking office, President Barack Obama will visit Ground Zero Thursday, a trip that comes just days after the military operation that killed Osama bin Laden. In early polling since Sunday night's news, the President hasn't seen the major bounce that many expected. And while the achievement certainly buoys his national security case, voters remain focused on the economy. Unemployment is high, home prices are low, and the deficit is astronomical.
Riding Retail: This year's late Easter was reflected in March's weak retail sales numbers. On Thursday, it should be a boon when retailers report April results. According to Thomson Reuters, chain store sales are expected to show an 8.4 percent upward jump from this period last year. That would continue what's been a strong year for the sector as an apparent consumer comeback continues to fuel activity. The big question mark, as gasoline reaches the $4 mark nationally, is when pain at the pump will hinder economic activity.
What's Driving General Motors: The nation's largest automaker reports quarterly numbers before the bell Thursday, with Wall Street forecasting earnings per share of 91 cents. After a choppy 2011 for the stock, shares of General Motors have returned to IPO levels. In part, the move higher has been driven by the perception that GM will be the biggest beneficiary of industry-wide supply shocks related to the Japanese earthquake and tsunami. Reports indicate that the Treasury Department will wait for GM's earnings report before deciding whether to sell more of its 500 million remaining GM shares (which it can do starting May 22, according to terms of the public offering). So, for the American taxpayer's sake, let's hope GM delivers blowout numbers.
Euro Crisis, Diving Dollar: The dollar fell to an 18-month low against the euro Wednesday, a day ahead of the European Central Bank's latest policy decision. While the consensus expectation doesn't include a rate hike, the markets will be watching ECB chief Jean-Claude Trichet's news conference for any clues on when one comes. While Europe is set to combat rising inflation with higher interest rates sooner or later, the double-edged sword would bring about even higher borrowing costs for troubled countries like Greece, Ireland and Portugal.
Art's Bleak Picture:Sotheby's had its first Impressionist and Modern art auction Tuesday night...and it landed with a thud. The most expensive painting went for $19 million, well under $25-35 million estimates. The problem, according to insiders, is not a lack of buyers, but a lack of important pieces on the market. Do collectors feel safer keeping their investments on the wall or in the bank? Christie's holds its auction Wednesday evening and we'll be watching every whack of the gavel.