Following its impressive run from the lows of exactly one year ago, the market appeared to have run out of steam this year, losing ground before pulling itself together in recent days.

As I discuss in today's RoundTable Review (Market Outlook and Top Picks), this turnaround owes a lot to the recent spate of positive news flow, both here in the U.S. as well as internationally. As such, the very near-term tone for the market should be in the neutral to positive category. Overall though, I don't expect the market to clearly break out in any direction any time soon, but remain largely range-bound, as I discuss here: Making Sense of This Market.

Labor Market Close to a Turnaround

The economic picture continues to brighten. The long anticipated turnaround in the U.S. labor market is drawing near. Friday's better-than-expected payroll numbers showed that while we still lost

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Gideon Rachman of the Financial Times talks to South Arican Finance minister Pravin Gordhan about the priorities for the new parliament, job creation and the World Cup.

Source: Gideon Rachman, Financial Times, January 29, 2010.

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The dollar has rebounded very quickly the past few days, and there are no roadblocks right now. The risk takers in the markets are running for safety again, sent running by China’s decision to curb lending and attempt to slow growth before their economy overheats.

You see, China was the linchpin for risk taking, because with China growing, commodities were in need, and commodity countries were very happily sending those commodities to China. The commodity countries would then be flush with cash, rising job creation, and be confident about their future… Interest rates would rise to combat inflation in the commodity countries, and the karma would be flowing for each respective currency.

But China said, “Whoa there, partner!” And I don’t blame them… They seemed to be the only major country that was experiencing economic growth… I mean, China’s most recent quarter will probably show GDP at 10%! Hey! It takes two

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The U.S. economy continues to recover at a painfully slow pace.

December auto sales looked reasonably good, at least when you compare them with the numbers we've been seeing over the last 15 months. Apart from the cash-for-clunkers August 2009 outlier, seasonally unadjusted U.S. car sales in December were higher than any month since the Lehman failure in September 2008. Even so, that still leaves December 2009 30% below the average December over 2004-2007. The worst may be behind us, but we're still a long way from normal.

Data source: Wardsauto.com

But without question Friday's report that seasonally adjusted U.S. payrolls declined by another 85,000 workers in December was a disappointment. I recall that when President Obama was asked on February 9, "how can the American people gauge whether or not your programs are working?", he responded:

I think my

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With the release of the Automatic Data Processing (ADP) numbers this morning and the BLS jobs report due out on Friday (and initial claims tomorrow), jobs -- or the lack of them -- is clearly front and center. Normally when people talk about job losses or gains, they are talking about net job creation. After all, even in the biggest booms, there are still some people who are losing their jobs, and even in the deepest darkest recessions, there are some folks who find new jobs. There is an interesting article today by Andy Harless of Atlantic Asset Management posted on Economist View that disaggregates it into the rate of job destruction and the rate of job creation. It is a long and interesting article and is worth reading. The key trends are shown in the graph below. If the blue line is above ...