Jamie Dlugosch

Don't Find Yourself on the Sidelines

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World stocks were mostly mixed over night given the concern over global economics. Japan put in a gain of 1.7% on a weaker yen. Hong Kong was down sharply with a 3.4% loss on news that Bank of America is liquidating its stake in a Chinese bank. South Korea was up 2.8% and Australia moved 1% higher. European stocks opened lower. Britain fell by more than 1% with Germany and France down fractionally.

Dow futures are selling off this morning on the Alcoa news. As I stated previously, the New Year rally will require news to be not as bad as expected to hold.

As we move closer to the key Friday employment number look for traders to get a bit more nervous. We had a few sessions of smooth sailing so to give some back here is not the end of the world. Ultimately the economic data will dictate where we go from here.

Next week we start to hear directly from the companies. My guess is that the news will be just as expected. That means we will have avoided the worst. That is why stocks are up more than 20% from the lows. Guidance will be important and even though job cut announcements like we see from Alcoa are painful, they are required for companies to stand a chance in this environment.