Suddenly its time for markets to get ready to digest another important employment number as the debate rages on whether the stock market has gotten ahead of the recovery.  

Image courtesy Alex E. Proimos: data has clearly been the norm since late December but I have argued in favor of choppy data, not economic reversal.  

Now with a big NFP number coming next Friday the market will begin to handicap the outcome and what it means for the overall direction of the worlds markets.

The Consumer Confidence data this AM had some weaker headlines, but between the lines consumers were more positive on their assessment of the labor market.  

By definition (I’m not an economist), the survey measures both jobs plentiful (13.9 vs. 12.5) and jobs hard-to-get (32.5 vs. 32.7).  

In both cases they were better than expected and improved m/m and have reached post-crisis high points.  

Tough to argue against consumers feeling better about their job prospects, and this reality will have follow through in their overall spending.  

As for the market, people are pricing for poor jobs data.

If the market feels we have poor economic growth but still a Fed that won’t change their taper course, we might find ourselves back into mid January volatility.

For EM this is another opportunity to trade the weakness and focus on what has been a predictable range trade on the MSCI EM Index between 925-975.


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