U.S. stock futures are trading a little higher but paring its gains ahead of this morning’s Weekly Initial Claims Report. This report, the first U.S. jobs data since last Friday’s Non-Farm Payrolls Report, may provide more evidence about the strength of the recovery.
Asian markets showed more gains overnight as concerns about European sovereign debt eased. Today, investors are banking on the markets to continue the upside momentum developing since traders returned following the Labor Day holiday.
The easing of worries that European debt issues will derail the economy seems to have given investors a little more confidence, but today’s jobs data will likely set the tone.
This week’s rally has been nice but will not mean anything until the September E-mini S&P 500 takes out 1107.25. If this happens then it will indicate that the bulls are gaining a little more confidence.
The break in the T-Bond market this morning also indicates that investors will be willing to dump safe assets if there is another alternative, but in my opinion the market that investors should watch for signs of a stock market rally is the Gold market. I think that a sure sign that investors are gaining confidence in the global recovery will be when they begin to sell gold with conviction.
Recently, investors have been pouring money into gold because stocks haven’t been paying off and for a hedge against a collapse in paper assets. If this fear begins to disappear, then look for money to flow out of gold and into stocks.
