September's Last Week Will Be the Rally's Biggest Test
September is usually a lousy time for stocks, but a steady albeit shallow stream of encouraging economic news has equities on a four-week winning streak -- one that's sure to be tested by a slew of data in the days ahead.
The Dow surged nearly 200 points on Friday, leaving it just 3% off its 52-week peak hit last April. The blue-chip index has gained 8.4% this month, while the broader S&P 500 ($INX) is up 9.5%. The more volatile, tech-heavy Nasdaq Composite ($COMPX) has surged 12.6% this month so far.
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Whether this rally can last or is merely the latest upswing in a months-long pattern of sideways trading depends on what the economic news tells us about unemployment, says Doreen Mogavero, chief executive, co-founder and head of floor trading at Mogavero, Lee & Co.
"As always, jobs are the primary focus, and I think it's what we all feel is going to be the catalyst for a real, sustainable rally," Mogavero says. With consumer confidence, personal consumption and GDP just three of the items on this week's calendar, stocks have some hurdles ahead them. "It's a pretty packed week of economic data and all of it very relevant to the job market," says Mogavero.
For more on Mogavero's outlook from the floor of the New York Stock Exchange (NYX), see the video below:
