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