Jobs, Unemployment Take Center Stage: Coming Week

Updated from Sunday, Sept. 27

Update mentions that Abbott Laboratories has reached an agreement to acquire the pharmaceutical unit of Belgium's Solvay..

NEW YORK (TheStreet) -- The books are about to be closed on the third quarter, with bulls exhaling after a double-digit rate of return. The end of September, historically a terrible month for equities, is within sight and equities are still trading in positive territory.

Unfortunately, it won't be an easy road over the next five sessions. Between now and the end of the coming week, bulls will need to withstand a barrage of economic data, including the ever-important monthly government jobs report.

The nonfarm payrolls report, due Friday at 8:30 a.m. EDT, should show that the U.S. economy lost 188,000 jobs in September, according to a Reuters poll of economists. That would be the third straight month of moderating job losses, which market observers say is an important trend in moving towards a recovery.

"We may be losing jobs, but the correct trend is holding," said Robert Pavlik, chief market strategist with Banyan Partners. "The Street understands that employment is a lagging indicator. There may be some initial reaction to a higher unemployment rate. The market, though, has been trading on a payrolls trend that has been improving."

When the previous month's payrolls data were released, equity markets rallied despite an unexpected hike in the unemployment rate. This time around, economists are forecasting that the unemployment rate ticked higher this month to 9.8% from 9.7% in August. The fear for the bulls is that retail investors will focus on the negative aspects of the jobs report, while ignoring the moderating number of jobs lost.