This appears to be a Reuters news release for May 14th!
I pasted this in case the link gets pulled:
from:
http://biz.yahoo.com/rf/000429/d.html
The Fed meets on *Teusday, May 16th*. Is PPI released on Friday, May 12th?
What is/was the "benign data earlier in the week"- presumably the week of May
8-12?
============
Saturday April 29, 6:14 am Eastern Time
UK Stocks Outlook-Market braces for U.S. rate vote
By David Holmes
LONDON, May 14 (Reuters) - It was ever thus.
Events in the U.S. are likely to be a key focus for the British stock market
next week, amid worries that an interest rate increase in
the world's biggest economy could derail the bull market on both sides of the
Atlantic.
On Tuesday, a meeting of the U.S. Federal Reserve's interest-rate committee
could vote to tighten credit -- a decision that would sent tremors through
shares on
Wall Street and around the world.
Even a warning that the Fed was moving towards a tightening bias could have a
significant impact, putting investors on guard for a rate hike increasingly
likely to
come later this year.
``From time to time, events on Wall Street become of critical concern, and this
is one of those times,'' said Richard Jeffrey, chief economist and investment
strategist
at investment bank CCF Charterhouse.
For London, Tuesday's Fed meeting comes at a sensitive time.
Echoing a rise on Wall Street, the leading FTSE 100 index surged to a succession
of record peaks in the early months of the year -- leaving the market
potentially
vulnerable to bad news, if optimistic assumptions on inflation and lending rates
prove mistaken.
Granted, worries of a possible U.S. rate increase have circulated for some time,
as indications continued of strong growth in the American economy.
Yet Friday's stronger-than-expected U.S. inflation data brought those fears
sharply to the fore, contradicting benign data earlier in the week and
heightening the
prospect that Tuesday's Fed meeting will have to consider a rate move.
Any increase could lead to worries that it could be the first of several,
undercutting the favourable conditions of easy credit that have proved so stock
market positive
in recent months.
Closer to home, a spate of domestic economic indicators were also due next week,
including retail prices and retail sales for April. Companies reporting
including
retailer Marks & Spencer (quote from Yahoo! UK & Ireland: MKS.L), British
Telecommunications (quote from Yahoo! UK & Ireland: BT.L) and brewing-to-leisure
group
Bass (quote from Yahoo! UK & Ireland: BASS.L).
Yet the domestic figures were unlikely to be surprising enough to take the
spotlight away from the U.S., where the benchmark Dow index has sped 1,000
points
beyond the 10,000 mark in the month since that closely-watched barrier was first
breached.
To be sure, a U.S. rate rise could be taken calmly, if markets reason the Fed
was actively pre-emptively to head off inflation pressures later this year.
Yet even before Friday's strong U.S. inflation figures, the record-breaking run
enjoyed by the FTSE 100 in the early months of the year seemed to have run into
the
sand.
Since the end of March, the leading FTSE 100 index has spiked to a record high
of 6,663.8, but has mostly traded in a range broadly between 6,300 and 6,600 in
that time.
Analysts on Friday warned it was hard to see what fresh positive events would
have the power to move the UK market on to fresh highs, with the FTSE 100
looking
expensive on a near-record high multiple of around 28 times earnings.
Investors seeking the outperforming sectors of the rest of the year have
increasingly looked to low-rated stocks, in neglected areas of the market, that
may be
relatively insulated even if there is a rout on Wall Street.
However such sectors have a relatively limited impact on the direction of the
FTSE 100 index, which is heavily weighted towards the big sectors such as banks,
drugs and telecoms whose valuation is highly geared to transAtlantic trends.
Betting on the direction of such stocks therefore depends crucially on how Wall
Street reacts to the Fed's decision next week.
``The U.S. equity market has taken a bet that fast growth will not lead to
higher inflation,'' said Jeffrey. ``In all probablity it is a wager that will be
lost.''
-- Forrest Bishop Manager, Interworld Productions, LLC Chairman, Institute of Atomic-Scale Engineering http://www.speakeasy.org/~forrestb
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