Although the jury is still out, investors seem increasingly less worried about disaster in the euro zone and more comfortable with the status quo in the U.S. economy, a market professional told CNBC Monday.
As the final quarter of 2012 begins, the relative performance in the S&P 500 and the CBOE Volatility Index — a key benchmark of investor sentiment — shows markets are performing fairly well in the face of a blizzard of negative headlines.
Spain’s long-awaited bank audit showed “Spanish banks are only 60 percent as broke as we feared, and I think that's good enough to overcome euro zone joblessness of 11.4 percent” and a sluggish Chinese economy, said Scott Nations, president and chief investment officer at NationsShares.
Questions still abound about whether the 17 nations of the euro club will solve their debt crisis. Yet Nations said that “to the degree that unlimited bond buying in the euro zone is going to overwhelm the politics in the euro zone, then we're in pretty good shape.”
Nations cautioned, however, that Europe’s woes are not yet in the rear view mirror, as protests roil Spain and Greece flirts with the prospect of having to be bailed out for a third time. “It’s just a function of the fact that there’s 17 countries and 17 governments and 17 societies,” he said. “It's just completely messy and the nature of the beast.”
Markets are looking ahead to Friday’s all-important September U.S. employment report, and the implications it may have for the re-election chances of President Barack Obama. Nations said that the jobs number would be “really important,” as a payrolls figure below 100,000 could be negative for Obama.
“I think if it's over 150,000, you're going to see him a whole lot for the week after that, talking about jobs and how he's creating jobs,” the investor added.
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No disclosure information was available for Scott Nations.