Markets Anxiously Await Tomorrow’s Job Report

The stock market continues to recover their losses this morning, inching closer and closer to its 200-day moving average. Once it hits this critical level, stocks will face a challenge that could dictate whether stocks are truly in the beginning stages of a bear market or if this was just a short-term correction that will help stocks build the strength to eventually set new all-time high levels. Although I am long term bearish on the US stock market, I’m not yet convinced that now is the time when the trend will reverse. I see a 60% probability of stocks building strength and continuing to climb higher. However, my guess is nothing more than that, a guess.

Tomorrow is a HUGE day for both the stock market and for mortgage interest rates. It is the day when the Bureau of Labor Statistics releases their estimate of new job creations for the month of October. Part of the reason I’m leaning towards stocks recovering all their losses is that I feel the odds are probable that the report will show a stronger than expected labor market. When you consider that we are heading into the strongest retail season of the year, it seems likely that many will have already started to hire to have enough trained staff by the time consumers hit the malls for their holiday shopping. I will let you know the results in tomorrow’s market update.

Although bonds are performing well today, we feel it is prudent to lock in ahead of tomorrow’s report.