Stocks Higher Before Labor, Consumer Data

Equity futures are pointing upwards following four days of declines. Thirty minutes before the weekly jobless claims report, the S&P 500 is 6 points up, more than reversing the 3-point loss from Wednesday.

Some of the optimism may be based on the minutes from the Federal Reserve’s August monetary policy meeting, released yesterday. It was clear from the meeting that an accommodative policy stance won’t be tightened any time soon, which investors see as a boon. However, it’s a two-edged sword: policy will remain loose because central bank officials feel “considerable uncertainty” about the prospects for a strong economic recovery.

As for fiscal policy, Treasury Secretary Tim Geithner said yesterday it was too soon to remove the temporary policies directed at promoting recovery.

Looking ahead to today, the key releases concern the labor market and consumer spending, two areas crucial to any hopes of a V-shaped recovery. So while markets have been somewhat indifferent to fresh data recently, weekly employment claims and the ISM Services indexes should definitely grab attention. 

Unfortunately, that attention won’t be a good thing. According to forecasts, new claims for jobless benefits are expected to remain above 550k per week, and the services index is expected to be in decline for the 11th straight month.

If forecasts are correct and markets trade on data today, the optimism in equity futures this morning could be a faint memory by the afternoon.

Key Releases Today:

8:30 â€