- Commentary -

September 8, 2009 (FinancialWire) (Philip Holmes) — Stocks rallied going into the holiday, but uncertainty reigns. Some companies, like Kraft (NYSE: KFT) are showing gusto, but others may be in for a fall. It all comes down to how investors read the numbers.

Jobs, for one. Last Friday’s release showed August job losses were less than expected, but how much gloom has been priced into the market? A lot, if we are to expect a continuation of the summer fun.

The jobless rate is the worst it’s been in a quarter century, and net losses continue. How bad that is depends on whom you ask. The “we’re in a recovery now and jobs are a trailing indicator” crowd will likely be buying. But there are many economists who see a bumpy recovery, or even a double-dip at the recession well in our future.

Investors shouldn’t have much in the way of economic news to chew on in the short week. The Federal Reserve’s Beige Book survey is due out Wednesday, and we should see the July trade report on Thursday. Trade deficit numbers are noisy, what with consumers on strike. The U.S. may even start to look good as long as others are proportionately worse.

So pay keen attention to the University of Michigan’s consumer sentiment index, which is due Friday. Economists are looking for a bump.

Kraft Foods is expected to up its bid for Cadbury, after the British firm rejected Kraft’s £10.2 billion offer. M&A watchers are watching the deal in hopes that it will kick off a season of robust activity.

We should also pay close attention to President Obama’s Wednesday address on healthcare. If, as expected, he tosses the “public option” under the bus, investors might see some upward movement in the sector.

Who knows, there might even be a halo effect. The public option is dear to the left wing if the Democratic Party, so by dealing it out the administration might be signaling a pro-industry lean on any number of policy points. Cap and Trade, anyone?

[Go to http://www.financialwire.net/?s=philip+holmes to see more commentaries by Philip Holmes.]

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