The bulls held their ground on Friday with both the Dow and S&P in the green as Wall Street breathed a collective sign of relief over the latest jobs report.
Although the data still showed the economy shed 54,000 jobs overall, that wasn’t nearly as bad the Street feared. (In fact, private employment, considered a better gauge of labor market health, increased by 67,000.)
The bulls contend the jobs number was only the latest major report that showed the economy may be on the mend.
Earlier this week ISM shocked investors by defying expectations of a decline and showing factory output increased. Also this week China's manufacturing sector staged a rebound and Australia's economy grew at the fastest pace in three years in the second quarter.
Is relatively positive economic data enough to keep the bullish mojo going in the stock market?
Instant Insights with the Fast Money traders
I think the rally is sustainable, says Joe Terranova. Money managers who are overweight government debt will probably start to reallocate. The latest ISM data, jobs numbers and China PMI should all increase investors appetite for risk. The right trade is the hard trade; buy the market right here.
This is a slow week, reminds Steve Grasso. Because the move higher is on light volume, if you’re a retail investor I wouldn’t let these moves dictate your outlook on the market. I definitely would not go all into this rally. Until the S&P breaks above 1130 I think the market is stuck in a range.
However if you’re a trader, adds Grasso, I’d keep an eye on 1107 the 100 day moving average, If the market breaks above that I think it goes to 1115.