This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Global Macro: Jobs Report May Confirm Uptrend

NEW YORK (TheStreet) -- The jobs report that will be released on Friday may signal that economic strength will continue into 2014 and may push stocks higher.

Since the Federal Reserve began to reduce its bond purchases in December, strong labor market data have kept markets in an uptrend. Investors have viewed higher-than-expected job numbers as justification for tighter monetary policy.

The chart below is of the SPDR S&P 500  (SPY). The initial breakout above the 182 level in late December was due to the euphoria surrounding tapering, as traders took the Fed's decision to cut stimulus to mean that policymakers viewed the economic recovery as sustainable.

Since the late month run-up in equities, the new year has been filled with calm consolidation. Investors are now looking for a fresh round of positive data to spur another rally.

The volatility index, better known as VIX, remains in a steady downtrend, which signals investor confidence in the equities uptrend. Although short-term spikes in the VIX could lead to equity selling, there hasn't been a reversal pattern yet in equities.

The positive data have created a virtuous cycle, guiding expectations higher. That leaves room for slight misses that could push investor sentiment lower.

The expectation for the payroll number is just under 200,000 jobs added in December. The 200,000 figure has had some significance in the past determining if the jobs number was viewed as overwhelmingly positive or just average.

Despite the risk of a one-time miss that would push equities lower, the long-term employment trend remains strong. As long as the economy keeps pace with the improvement seen last quarter, investor sentiment should remain elevated. SPY Chart SPY data by YCharts

At the time of publication, the author had no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SPY $205.74 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs