Coming Week: Data Barrage

"Next week is an important, albeit shortened, week," says Mendelsohn. "Everything is going to be very concentrated near the end of the week. However, some people may take the extra days off next week, so we don't know what we're going to get."

The market will get some important key pieces to the economic puzzle for 2007, culminating in the December jobs report on Friday.

But first, Wednesday will bring the delayed release of the minutes from the Federal Open Market Committee's last meeting, previously scheduled for Tuesday. During the Dec. 12 meeting, the Fed kept rates unchanged at 5.25% for the fourth consecutive time but judged that some inflation risks still remain.

"With the economic data we've gotten this week, I'm not sure the FOMC minutes will be apropos," says Mendelsohn. "What the Fed said about inflation a month ago is different from what we're seeing in the data now."

Reports on construction spending for November and automobile sales for December from General Motors (GM Quote), Ford (F Quote) and Toyota (TM Quote) are also due Wednesday.

The Institute for Supply Management's manufacturing index for December is also on the schedule, as is the services index. Currently, the market expects a reading of 50.0 on the manufacturing side and a services reading of 57.0.

Paul Nolte, director of investments with Hinsdale Associates, says that the ISM figures could be the most important factor for the coming week, and he expects the market to take its cue from the data.

"Traders want to see whether services follow manufacturing or whether manufacturing follows services," says Nolte. "As long as the manufacturing doesn't spill over into services, we could be OK."

Thursday's round of data will begin before the bell with initial jobless claims for the week ended Dec. 30. Factory orders for November will also be released Thursday. Economists expect an increase of 1.5%, compared with a decline of 4.7% in October.

The all-important December nonfarm payroll data should dominate early trading on Friday. Economists project that roughly 110,000 jobs were added during the month, down from 132,000 in November. Investors took a 2.0% growth rate in third-quarter gross domestic product as evidence the economy is slowing, reflected in the lower expected jobs-created number.

The unemployment rate is expected to remain steady at 4.5% and the average workweek is predicted to stay at 33.9 hours. Hourly earnings are forecast to rise 0.3%, compared with growth of 0.2% in November.

"That'll be the next big news to see if we continue to run below trend," says Nolte. "We're going to be on the lookout for any additional strength. That'll set the tone for the early part of the year, and certainly January."

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting