Investors to move focus from Europe to US economy

Encouraging news from Europe helped catch fire on stock prices in October. This week, investors will shift their focus to U.S. economic data, which might temper their exuberance.

Three events this week will command attention: the U.S. jobs report for October, the Federal Reserve's policy meeting and Fed Chairman Ben Bernanke's quarterly news conference.

A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing. Yet the news may have also raised unrealistic expectations about the economy. Investors could end up disappointed.

Eric Green, chief U.S. economist at TD Securities said, “There’s a big difference between avoiding recession and stronger growth". "The economic data will be OK, but it's not going to be a catalyst to move stocks up" significantly.

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Public down on U.S. economy

The extreme temper that settled over the U.S. during the summer has eased slightly, but Americans stay gloomy about the economy and more than half say President Barack Obama does not inspire confidence about a recovery.

A sizable majority — more than 7 in 10 — believe the country is headed in the wrong direction and, in a new high, 43 percent explain the nation's economy as "very poor," according to a new Associated Press-GfK poll. Among those surveyed, less than 40 percent say Obama's proposed remedies for high unemployment would increase jobs significantly.

The pessimism is not a good sign for the nation's recovery hopes and presents a more urgent challenge for Obama as he mounts his re-election bid.

About 4 in 10 think unemployment will rise in the coming year; just 23 percent expect it to decrease. And few expect the government to be able to help. Only 41 percent say the government can do much to create jobs, and less than 40 percent say the main part of Obama's jobs proposal would increase employment significantly.

What's more, expectations for the coming year have not improved, with 41 percent believing the economy will remain the same, 27 percent saying it will get worse and 30 percent saying it will improve.

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