NEW YORK ( TheStreet) -- Stocks finally snapped back in September, raising the stakes for President Barack Obama's forthcoming plan to revive the job market. Set for reveal in a nationally televised speech at 7 p.m. ET on Thursday, the plan is reportedly a $300 billion package that will include $120 billion to maintain the current payroll tax reduction and $50 billion to further extend unemployment benefits. It will also provide funds for infrastructure projects and aid to local and state governments, according to multiple media reports. Ian Shepherdson, chief U.S. economist at High Frequency Economics, doesn't see a big benefit to the economy from the extension of the payroll tax reduction as this "just keeps people in the same position they are in today." He is more keen on plans to broaden the reduction to include employer contributions too, saying this at least is new and would represent stimulus of about $100 billion. Other elements -- the infrastructure spending etc. -- could translate to another $100 billion, which would be around 1.3% of GDP, not quite enough in Shepherdson's view. "A net stimulus of 1% of GDP next year would be welcome, but it would not be enough to fully insulate the U.S. from major bank failures in Europe; we think 3% of GDP would be required for that," he says. "We hope, therefore, that Europe's banks will be propped up by whatever means for as long as possible, so as to give the U.S. the best chance to develop a degree of domestic momentum." As for where stocks go from here, Sam Stovall, chief investment strategist at Standard & Poor's, weighed in after Wednesday's rise, saying he believes near-term risks are still elevated and advises investors take a "cautious stance," even though S&P's year-end target for the S&P 500 of 1400 implies a gain of nearly 17% from current levels. "Investors are trying to decide whether they should surrender to attractive valuations and buy into a market that may be propelled by the President's jobs speech and the prospect of additional quantitative easing, or, if by doing so, they would only be responding to a siren call as the U.S. ultimately heads into recession on the heels of a renewed price decline," he writes.
Stovall feels Obama's plan "may not go far enough to jumpstart a half-speed economy." The president's speech won't be the only high-profile talk on Thursday as Federal Reserve Chairman Ben Bernanke is slated to speak on the outlook for the U.S. economy in Minneapolis at 1:30 p.m. ET, and European Central Bank President Jean-Claude Trichet set to hold a press conference before the opening bell after the latest rate decision across the pond. Thursday's economic data features initial and continuing jobless claims for the weeks ended Sept. 3 and Aug. 27 at 8:30 a.m. ET, and the expectation is the initial claims figure will come in right at 400,000, down slightly from 409,000 the prior week but still elevated. Continuing claims are seen at 3.7 million. High Frequency Economics' Shepherdson expects to see the impact of Hurricane Irene on the weekly initial jobless claims number, putting his estimate at 440,000. "The underlying trend in claims is more or less flat, we think, but the hurricane effect means that it will be obscured for the next couple of weeks or so," he says. Also due on Thursday are the trade balance for July at 8:30 a.m. ET with the consensus at negative $51.5 billion, and crude inventories for the week ended Sept. 3 at 11 a.m. As expected at this time of the quarter, the earnings calendar is light. The morning reporters include John Wiley & Sons ( JW.A), Korn/Ferry International ( KFY), and Smithfield Foods ( SFD). Kroger ( KR) and Lululemon Athletica ( LULU) arrive after the close. Despite pulling back around 15% since hitting a 52-week high of $64.49 in late July, Lululemon shares are still up nearly 60% since the start of 2011 and more than 200% in the past year. The average estimate of analysts polled by Thomson Reuters is for earnings of 22 cents a share in its July-ended fiscal second quarter, flat with its first-quarter profit, despite expectations that revenue will rise to $206.4 million from $186.8 million on a sequential basis. Jefferies & Co. previewed the report on Tuesday, saying it expects an in-line number and a conservative guidance. The firm is positive about the Canadian athletic apparel maker but has a hold rating on the high-flying stock.
"We believe brand and category momentum remains very much intact and fully expect another beat+raise scenario," the firm said. "Valuation is still hard to justify (hence our Hold), but accelerated growth of ivivva and international could make it more palatable if executed well." Wall Street seems to share that opinion as 11 of the 21 ratings on the stock are holds, along with one sell, two underperforms, five buys and two strong buys. -- Written by Michael Baron in New York.