Key data in next 48 hours: Initial jobless claims tomorrow, and non farm payrolls/monthly unemployment report/hourly earnings Friday. Any news will be good news. Why? A weak employment number could draw comments from the Fed and the chit chat will feature well placed and timed notions of cutting rates. The comments may not emanate immediately, but within a few days or few weeks, we'll hear how they are concerned about the economy, and as employment craters, the consumer will be on the ropes with spending (as well as re-setting mortgages) and the financial markets will demand a bail out. Therefore, a seizure in the financial market will force the Feds hands. There is no doubt they are watching closely, and it wont even depend upon Ben Bernanke comments directly, it could be from any Fed Governor or hired gun at the Wall St Journal. The mere mention or discussion the Fed "might" cut rates will stem the correction and cause a turnaround.
A strong employment number could also stem the pessimistic tide. If the stock market is concerned about mortgages and spending...their concerns will be alleviated with a strong employment report. The pessimists wont be able to argue in the face of recent econ reports that include a 3.6% GDP growth rate, a 112.6 consumer confidence report, and low unemployment or high non farm payrolls.
Therefore, any news tomorrow and Friday could be good news! Good luck.
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