The biggest economic report of the month is due out at 8:30am on Friday. It’s become even more closely watched if that’s possible because of the Fed’s focus on the unemployment rate for scaling back their massive bond purchases and then raising interest rates. It is widely forecasted that tomorrow’s number will be good to strong.
What becomes very interesting for me is how the market would view better economic news. Is good news still good news or will we start to morph into good news is bad news because Bernanke’s easy money policies will be ending. This is what normally happens during the maturation of a bull market. At the end, good news or strong economic data is reacted to poorly because the Fed is on the verge of raising interest rates to slow down the economy and control inflation. I don’t think we have that type of good news on the horizon anytime soon, but today’s reaction to good data will be instructive.
