The economic calendar is unusually light this week, with only the ISM Index reporting on Friday. It shouldn’t surprise anyone that the report will likely show a decline from the previous month. It has been an overriding theme this year that even though the bar gets set lower and lower as the months go by, the market still manages to underestimate the scope of the economic slowdown and reports continue to disappoint.

With the economic calendar being so light, I thought I would take some time to give you my thoughts on what I see happening in the markets over the next 12 months.

As I mentioned in my piece on Dec. 17, I think the market will do well in 2009. There are just way too many coincidences lining up to lead me to believe otherwise. I still think there will ...

In the currency market, the dollar was slightly higher against the euro. Late Wednesday, the euro was trading at $1.27 vs. $1.271 on Tuesday.

Sterling took a much bigger hit, falling from $1.4916 to $1.4768, as the currencies are pressured by expectations for those big rate cuts by the European Central Bank and Bank of England today.

In the day’s hard numbers, bleak data continued piling up.

Non-manufacturing activity in the US contracted in November at the fastest pace on record, according to a survey of companies released by the Institute for Supply Management. The ISM index sank to 37.3% from 44.4% in October. That’s the lowest level since the survey began in 1997.

Also announced was that the US private sector shed 250,000 jobs in November, according to the ADP national employment index. That was the biggest job loss in seven years.

The ADP report precedes Friday’s government labor market figures for November,

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Now that the turkey-induced coma has worn off, it’s time for the market to get back to work. Heading into the final month of the year, we could hope for an early Christmas present and a strong rally, but that will be a tall order.

There are plenty of reports this week, but not one that could be considered ‘encouraging’. Both ISM reports this week are expected to show further contraction. The ISM Index is anticipated to show a slight decline down to a reading of 38, while the ISM Service report will likely show a very slight decline to 42.6. Both of these reports need to show a reading above 50 to indicate expansion, so they have a long way to go to reach that threshold.

The Factory Orders report for October is anticipated to show a nearly three percent slowdown, and I wouldn’t be surprised to see this report be

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What will Paulson say?   Dollar remains well bid…   How long for Safe Haven buyers?   G-20 Schmee 20! And Now… Today’s Pfennig!

Well… Nothing has changed since I left you last Wednesday. The awful economic data just keeps piling on, and the dollar gets bid up on safe haven purchases. We did see the Eurozone and Japan announce that they are in a recession… Chris was kind enough to leave me the following, so here’s some more Chris….

“The dollar weakened slightly after the US Industrial production numbers showed a rebound in October. The 1.3% monthly gain sounds great, but it followed September’s drop of 3.7% due to the Gulf Coast hurricanes. After adjusting for the effect of the hurricanes and a strike at Boeing, output dropped .7 percent during each of the past two months. The trend continues to be very weak, and the recession which currently grips the US is now expected

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China unveiled yesterday (Sunday) what it described as a “massive” economic stimulus package – a planned capital infusion of $586 billion that it plans to use to reverse its slowing growth, to loosen credit and to offset slowing global growth by stoking domestic demand.

Xinhua, China’s state-run news agency, said yesterday that the stimulus package represents “a shift long advocated by analysts of the Chinese economy and by some within the government. It comes amid indications that economic growth, exports and various industries are slowing.”

The decision was announced yesterday by the State Council after Premier Wen Jiabao presided over an executive meeting Wednesday. China reported in late October that its economy grew at a less-than-expected rate of 9% in the third quarter – the fifth straight quarter than growth has slowed, MarketWatch.com reported.

“As the global outlook deteriorates, we expect Chinese macro policy to turn increasingly aggressive,” Merrill Lynch

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China unveiled yesterday (Sunday) what it described as a “massive” economic stimulus package – a planned capital infusion of $586 billion that it plans to use to reverse its slowing growth, to loosen credit and to offset slowing global growth by stoking domestic demand. Xinhua, China’s state-run news agency, said yesterday that the stimulus package represents “a shift long advocated by analysts of the Chinese economy and by some within the government. It comes amid indications that economic growth, exports and various industries are slowing.” The decision was announced yesterday by the State Council after Premier Wen Jiabao presided over an executive meeting Wednesday. China reported in late October that its economy grew at a less-than-expected rate of 9% in the third quarter – the fifth straight quarter than growth has slowed, MarketWatch.com reported. "As the global outlook deteriorates, we expect Chinese ...

The winner is… Deflation!  Trading theme in place…  RBA cuts rates 75 BPS!  Manufacturing collapses! And Now… Today’s Pfennig! Good day… And a Terrific Tuesday to you! It’s Election Day! One more day of all that he said, she said, no I didn’t, yes you did, aggravating election advertising! That’s it! We’re finally finished with all of it! Thank Goodness it’s Election Day! TGIED!

This will be the end of another of the things that’s keeping the fundamentals in the back of the classroom. All we’ll have left is the credit squeeze… Unfortunately though I feel like we’re going to have to live with that one for some time to come! There are signs

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The winner is… Deflation!  Trading theme in place…  RBA cuts rates 75 BPS!  Manufacturing collapses! And Now… Today’s Pfennig! Good day… And a Terrific Tuesday to you! It’s Election Day! One more day of all that he said, she said, no I didn’t, yes you did, aggravating election advertising! That’s it! We’re finally finished with all of it! Thank Goodness it’s Election Day! TGIED!

This will be the end of another of the things that’s keeping the fundamentals in the back of the classroom. All we’ll have left is the credit squeeze… Unfortunately though I feel like we’re going to have to live with that one for some time to come! There are signs

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Both the ISM Index and ISM Services reports come out this week, and it looks like the slide continues. The Index report coming out this morning is likely to show a drop to 42.0 from last month’s 43.5 reading.

The Services Index is likely to show a more dramatic shift. Last months reading was 50.2, which shows ever so slight expansion since the reading was above 50.0. This month the reading is expected to dip down to 48.5, signaling contraction.

Factory orders for September are expected to show another drubbing. After posting a 4.0 percent drop in August, this report is expected to follow that up with another 1.5 percent drop in September. With GDP figures last week showing a smaller decline than expected, it may translate into a slightly better final number, although I would still expect to see a negative reading.  The Chicago Purchasing Managers Index showed a much

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I normally don't comment on the U.S. economy that much, but the just released Institute of Supply Managers numbers are horrible. The ISM index dropped from 43.5 in September to 38.9 in November. That is one of the worst numbers I have ever seen and indicates some very, very serious economic contraction.