Markets and exchange traded funds (ETFs) jump as optimistic data reports are released.  Consumer spending rose by 0.4% in October and incomes rose 0.5%.  New jobless benefit claims fell last week to the lowest level since July 2008.  However, orders for durable goods took the biggest drop in about two years.

  • Deep discounts have been the driver behind spending gains in recent months, so it remains uncertain how consumers will spend this holiday season, reports Meena Thiruvengadam and Jeff Bater of The Wall Street Journal.  As Black Friday looms, keep an eye on retail ETFs, such as  SPDR S&P Retail ETF (NYSEArca: XRT).
  • The Labor Department reported a drop of workers filing new applications for unemployment last week; the lowest level in more than two years says Jeffry Bartash of MarketWatch.
  • Joseph Lazzaro for Daily Finance explains that the overall industrial expansion of the U.S. is stuck in a sustained setback as durable goods orders plummeted 3.3%.  This could be a sign that growth remains sluggish.
  • New home sales in October were were down, despite depressed prices.  Reuters on Yahoo Finance reports that the Commerce Department reports sales dropped 8.1% to an annual rate of 283,000, after an upwardly revised pace of 308,000 in September. Tax credits expiring and a weak job market are contributing.
  • More breaking news from Ireland, as the Irish have unveiled tax hikes and budget measures that seek to cut euro10 billion ($13.3 billion) from spending and raise euro5 billion ($6.7 billion) in extra taxes from 2011 to 2014, says Associated Press.

Through the economic reports and market reaction, investors can navigate their investments with a solid trend following strategy.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.