Stock exchange traded funds have started fast out of the gate this week but the real test could come on Friday when markets get the November employment report.
Investors are watching for the nonfarm payrolls report as some encouraging news is indicating the U.S. economy may be turning around. Monday’s nearly 300 point Dow rally was driven in part by strong Black Friday sales.
Of course, investors remain glued to the Eurozone debt crisis, which has markets on edge.
“Greece appears to be getting sicker on a diet of austerity while the whole concept of leveraging a fund designed to guarantee debt seems counter intuitive. More important will be bond auctions in Britain, Italy, France, Spain, and Belgium, along with any intellectual progress by European finance ministers in recognizing the paramount importance in restoring investors confidence in the safety of Euroepan debt,” David Kelly, chief market strategist at JP Morgan Funds, wrote in a weekly outlook.
The 9% unemployment rate is a disappointing reminder that the economy in the U.S. is expanding at a snail’s pace and the Eurozone drama in the background is anchoring a full recovery, in the U.S, and globally. [Stock ETFs rally on Europe Hopes, Retail Sales]
In October, nonfarm payrolls showed an uptrend, with the addition of 80,000 jobs. The unemployment rate was at 9% last month, according to the U.S. Bureau of Labor Statistics.
According to a MarketWatch survey, analysts expect the U.S. economy to grow at a 2.5% rate, revised from the previous 2%. The Labor Department is expecting any near future reports to mirror the types of increases in recent months. The U.S. added 158,000 jobs in September and 104,000 in August. [S&P 500 ETFs Fall Below 50-Day Moving Average]
Monday’s stock ETF burst ended a seven-day losing streak, and markets are looking forward for some good employment data to lift spirits.
SPDR S&P 500 (NYSEArca: SPY) rose nearly 3% on Monday.
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own SPY