The Sign Wall Street Really Wants to See: 'Help Wanted'

Help Wanted signThe third and final peak week of second-quarter earnings season is finally, blessedly, upon us. Another 103 S&P 500 ($INX) companies and three Dow components will release results in the days ahead.

But if stocks have any hope of breaking out of their range-bound rut, the market will need to see a consistent drop in weekly jobless claims, says Kenny Polcari, managing director at interdealer broker ICAP Corporates, from the floor of the New York Stock Exchange (NYX).

True, the Dow Jones Industrial Average ($INDU) and S&P 500 each gained 7% in July to mark their best monthly performance in a year, thanks to better-than-expected bottom lines. And sure, the first trading day of August has been a boon to the bulls. But stand back a bit, and you'll notice that stocks have been stuck at 1,100 on the S&P 500 for months.

That's because traders and investors are just plain confused, Polcari says, as bulls and bears try to square the sharp recovery in corporate profits with a mishmash of economic data that's pointing to slower growth. In Polcari's view, the market won't make a decisive move up until those Thursday weekly jobless claims numbers (which are themselves stuck at 450,000 to 500,000) start dropping consistently.

"The initial weekly jobless claims number has got to break to the downside before the market gets a real positive sense that we are making progress on the recovery front," Polcari says. "Until we get real jobs growth, I don't think we're going to see a move that takes the market through that resistance level."

For more on Polcari's take on equities from the floor of the NYSE, see video.

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LARRY R.SMITH

You put them up and we can not get job's and evertime we do that you turn everone away and i been unploy from job for 3year's and 45 month and ssi deine ok bye as loster ok bye.

August 03 2010 at 10:48 PM Report abuse rate up rate down Reply
floyd60

Anyone who thinks the job market is going to substantialy improve, along with higher wages, needs to learn some basic economics. The economy will continue at it's present state for a long time. However companies in certain industries will improve their earnings and profits (those that produce food and goods that the growing number of lower paid people can afford). The gap between the wealthy (who produce what the poor can afford) and the poor (who purchase the cheaper goods and services)will grow ever larger. The middle class, as we have known it, will eventually dissappear. There will be the extremely wealthy, the moderately wealthy, the poor and the desperately poor. This state will be achieved via taxes. The wealthy classes will have disposable income far outstipping their taxes, the present middle class will be reduced to poor by taxes. E.G. If your income is $10 million and taxes take 50%, you still have 5 million disposable income (you could buy a $200 thousand Lamborghini and not even notice a dent in your wealth). If your income is $50 thousand, you might buy a Ford Taurus for $30 thousand on a 5 year contract, but you won't have much disposable income (might be able to eat out at McD's.

August 02 2010 at 11:01 AM Report abuse rate up rate down Reply
David

Wall Street if for Wall Street! Now that oil is over $80 per barrel, this will slow the market down again. And Congress doesn't understand this.

August 02 2010 at 9:46 AM Report abuse rate up rate down Reply
sadams8174

Heres a shovel ready project that will create or save thousands of jobs. Build the Border fence with the stimulus money. It would put contractors and workers to work. Save American jobs from illegals. And help stop illegal drugs! Seems like a no brainer, to Real Americans!

August 02 2010 at 9:27 AM Report abuse +1 rate up rate down Reply
MSmailbox

How odd... I've seen, time and time again, where Wall Street has rewarded companies following layoffs or head-cuts. This would seem to indicate that Wall Street has done a complete about-face. OK, so companies need to increase their payrolls and fatten their benefits, in order to grow. Next thing, Intel will be touting bigger and slower processors as the wave of the future! I guess that we were wrong... OK companies: Start hiring and pay your workers more to start out with, then cut their salaries as they gain experience and competance.

August 02 2010 at 8:41 AM Report abuse +1 rate up rate down Reply
scottee

if you think the government and the unions care about the people, you are mistaken...number one.......and The Fed has to stop printing and diluting our dollar and stop manipulating interest rates, gold prices and stock prices.

we need manufacturing jobs, free markets and savings accounts! not more of the same old policies for the last 40 years!

August 02 2010 at 7:52 AM Report abuse +2 rate up rate down Reply