The bulls are looking for the market's mild 2014 rally to resume in the week ahead, as investors digest data that suggest the economy is growing but not quickly enough to turn the Fed more hawkish.
On Thursday, the S&P 500 suffered the worst session since mid-April, and followed up those losses with further declines on Friday. But Friday also brought the employment report, which many saw as a near-perfect number for the market.
According to the Bureau of Labor Services, 209,000 jobs were added in July, which was below economist expectations of about 230,000, but still marked the sixth straight month of plus-200,000 job growth. Meanwhile, the unemployment rate ticked up to 6.2 percent as more people entered the labor force, and average hourly earnings were almost perfectly flat.
The instant takeaway? That the economy is growing fast enough to power corporate results, but not so quickly as to spur the Federal Reserve to raise the key federal funds rate earlier than anticipated (widely regarded as the market's key concern right now).
This is "not what the bears wanted to see," Mizuho Securities chief U.S. economist Steven Ricchiouto wrote in a Friday note. "The net is that the economy is growing at or slightly below trend on average. There is no reason for the market to move out of its trend."
While S&P futures gained a bit of ground immediately after the report, the market did trade lower on Friday. But Michael Block, chief strategist at Rhino Trading Partners, was sanguine.
"We're going to be fine here," Block said. "I think it creates buying opportunities."