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Fundamental Market Movers and the Week Ahead

Fundamentals


Disappointing jobs data weakened equity markets in the early going, but some late buying took the broader market to its third straight gain and within reach of its two-year high.
Nonfarm Payrolls for November increased by 39,000 and private payrolls increased by 50,000, but both disappointed as the consensus among economists polled by Briefing.com had called for respective increases of 130,000 and 140,000. An unexpected rise in the headline unemployment to 9.8% from 9.6% was also concerning.
However recent data, including retail sales and other labor reports, have raised optimism the recovery remains on track after hitting a soft patch in the summer, when fears of a double-dip recession drove stocks sharply lower.
Investors also think the FED would be less likely to cut stimulus to the economy while employment remained weak.
The lack of investor alarm over the jobs report was reflected in the CBOE Volatility Index, better known as Wall Street’s “fear gauge,” which shed 7.1 percent to 18.01.


The Week Ahead
This week, all eyes will be on Washington and Europe. European Union finance ministers will meet Monday and Tuesday as the Irish vote on their budget, a main contingency for the Irish aid package. The Obama Administration and Congress are expected to continue to move toward a compromise that would extend Bush’s (all of them) tax cuts for at least a year.
There is little economic data, but traders will focus on weekly jobless claims and any anecdotes on holiday shopping, to see whether the consumer will continue to spend or was just lured in by November sales.

 



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