This is Sheraz Mian filling in for Steve Reitmeister while he's on vacation.
A clear line divides this month's seven trading sessions, and that line is Friday's jobs report. The four trading sessions prior to the labor market report were all in the red, while the three subsequent ones have been in the green. This behavior is not restricted to stocks only; the response in the commodities markets has been even sharper.
So why would a supposedly backward-looking report have so much impact? The jobs report helped reverse growing negativity about the economy's momentum after some soft economic readings. There was concern in the market that the first-quarter's anemic pace would carry into the current quarter and beyond. By coming in as strong as it did, the jobs report was able to allay some of those concerns.
But the lingering positivity from that report can carry stocks only so far. The market will be clamoring for further evidence that the Friday report was more than just a positive outlier. And a key report in that respect will be Thursday's weekly Jobless Claims report. This report has been moving in the wrong direction over the last few weeks after consistently coming down in the preceding months. If the explanations for the report's recent erratic behavior are on the mark, then we should see the downtrend resume in Thursday's report. Last week's doubts, which gave us the first four trading sessions in the negative column, could come back to the forefront if we get a negative surprise on Thursday. Let's hope that is not the case.
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