What Will Move the Markets Now?

With most of the major economic news out of the way, MoneyShow's Jim Jubak shares his thoughts on what will move the markets between now and the end of the quarter.

So, what are we going to do for the last half of February and most of March? We're not going to have a whole lot of financial news. I mean, earnings season is pretty much over. We've had all of our big data dumps from the US economy. We do get, on February 28, we do get a second read on fourth quarter GDP growth but that's really the only big economic story over the next couple weeks for the end of February.

There is no February meeting of the Federal Reserve, so we don't get news out of the fed until the March meeting on the 19th. We've got our big stories out of the Bank of Japan meeting. China has moved. There's really not a whole lot going on, so the question is, what happens to the market when there's really not much in the way of driving it, except for a couple of scattered housing numbers?

I think it's a chance for the market to, sort of, consolidate, to figure out where it wants to go. We've had two very, very strong, but contradictory moves so far in 2014. We started off the year with everybody going down, because of fears that the emerging markets were going to somehow implode, explode, re-plode, because of the taper from the fed. Then we had, as China looked a little better, as the Bank of Japan put a little more money into it, as people said, "Oh, the fed's not really going to cut that much and the US economy looks fairly decent, but not great," and then we've had a rally for nine, ten days, in emerging market stocks, so it strikes me that what we get when we don't have much in the way of news is, we get people sitting there going, "Okay, so what does my portfolio look like, where do I want to position for the rest of the year?

There's not a strong trend to lead to a lot of action one way or another, so I think you see a period of settling, where people try to decide what price is a reasonable price going forward. I think the big drivers right now are, sort of, well, kind of, negative for the first half of the year. We've got some worries about the Japanese economy. We don't know exactly how the Bank of China is going to balance the need for growth versus the need to restrain the money supply, so I think that that, the consolidation is not going to be really to the upside. I don't see a reason to move, really, down, strongly. We do have some political news out of Brazil and India with elections coming up, that will keep things a little unsettled, so, basically, I'd say sideways for awhile, seems like a good bet for this market, and that will give the market some idea of where it wants to go, some better understanding of where it's been, over the next few weeks.

This is Jim Jubak for the MoneyShow.com video network.