Seven To Ten

Stocks futures rose as investors eyed a possible $22 billion deal for chewing gum giant Wrigley, an investor’s $170 million bid for more shares of Ford, and turned their focus to this week’s Federal Reserve meeting.

Investors are expecting the Fed to lower rates yet again at the end of its two-day meeting on Wednesday. Many economists expect the central bank will hold rates steady after that cut in a bid to keep inflation in check.

A slew of high-profile economic reports will come out this week - Tuesday (consumer confidence report), Thursday (Inflation issues for personal and income spending report) and Friday (government’s monthly jobs report).

Oil prices hit another record trading high near $120 a barrel after a refinery strike in the U.K. Shares of automaker Ford soared in pre-market trading after billionaire investor Kirk Kerkorian’s Tracinda Corp. said it would make a bid for 20 million shares valued at $170 million. The $8.50 a share offer represents a 13.3% premium to Friday’s close. Kerkorian, who already owns 4.7% of Ford, is looking to control more than 5% of the company.

Verizon posted first-quarter earnings results that met Wall Street’s expectations. Sales were up 5.5%, but shares were flat in pre-market trading.

In major deal news, Mars and Warren Buffett’s Berkshire Hathaway are near a deal to buy chewing gum giant Wm. Wrigley Jr. for more than $22 billion. Microsoft’s deadline for Yahoo to respond to its takeover passed on Saturday, which means the three-month battle for Yahoo may soon turn hostile.

Also over the weekend, Continental Airlines said it would not pursue a merger with another carrier. Media conglomerate Walt Disney could be hurt by a controversial photo of 15-year old singing and acting superstar Miley Cyrus which appears in an upcoming June issue of Vanity Fair.

The photo which shows her posing topless, although with her chest covered by a bedsheet, was seen as too racy for the wholesome “Hannah Montana” franchise, which produced $1 billion in sales for Disney last year. Disney shares were up nearly 1% in early trading in Frankfurt despite the news of the photo over the weekend.

In global trade, Asian markets headed mostly higher. European shares also rose in early trading.

Though times are tough now, Americans believe the economy will bounce back by next year. A poll showed 60% of respondents think economic conditions in the United States will be “good” next year.

Most people realize that the economy has cycles of ups and downs. Fortunately, the last two recessions were some of the shortest on record, so in 2009 we should be pulling up out of this. Most Americans feel the economists are right.

83% said they are “confident” of maintaining their standards of living next year, and 85% are “confident” they will keep their jobs over the next six months. Consumers also showed faith that they would be able to pay off their future debts, with 90% of respondents demonstrating confidence they would be able to meet their monthly mortgage payments for the duration of the mortgage.

Other debts like college loans, car payments, and credit cards are in no danger of being defaulted too. The average amount of credit card debt of those polled was $4,000. The Fed’s rate cuts will start to take their toll later this year, and hopefully, the economy should bounce back by the end of 2008.

Everybody is concerned about the weak dollar. But even as the greenback sinks to new lows against the euro and other global currencies, experts say this is not necessarily a bad thing for the U.S. economy.

The falling dollar pose problem for an economy in recession and facing higher inflation. Consumers have to pay more for imported goods like toys made in China or a bottle of wine from France’s Bordeaux region.

It also drives up the cost of commodities priced in dollars. And unless you’ve been living under a rock, commodities have skyrocketed to historic highs.

Confidence by international investors in buying dollar-denominated securities is also affected. Although many foreigners are still buying more U.S. securities than they are selling, there are signs that these investors are slowly shifting away from assets tainted by the greenback, such as U.S. Treasurys.

Most Americans think times are tough because they are feeling the pinch from rising prices. A survey showed that 65% are “very concerned” about inflation, while 26% are “somewhat concerned.”

Unemployment is also a major concern. The Department of Labor reveals that America has has already lost 85,000 jobs so far this year, with February’s net job report showing the worst loss in nearly five years.

To balance the threat of recession against rising inflation, the Federal Reserve announced a 3/4 percentage point cut of its key interest rate. The purpose for the central bank rate cuts is to boost the economy and stave off a recession. But lower interest rates can also weaken the dollar, sending inflation higher.

The Fed acknowledged that “uncertainty about the inflation outlook has increased.” Inflation hurts consumers and many people will be cutting back on their spending habits. Are you feeling the pinch already?