In a week during which a slew of major corporate results will be released, US investors eyes will be firmly on the US government's September jobs report and how much longer the Federal Reserve will likely keep its current stimulus program in place.
The employment data, set to be published on Tuesday in Washington, was delayed from October 4 because of the recent 16-day partial government shutdown.
Economists are forecasting an increase of 180,000 jobs last month, following the 169,000 added in August, and for the unemployment rate to stay at 7.3 per cent.
Even so, September's numbers may prove fleeting, given the now widely expected negative impact the shutdown on the US economy. That in turn could make the Fed hesitant to taper its pace of bond buying anytime soon.
The next Federal Open Market Committee meeting is set for October 29 and 30.
Indeed, a Bloomberg News survey of economists showed they expect Fed policy makers to delay a decision until March. At that point the survey showed that bets favour a cut in the monthly purchase target to US$70 billion from US$85 billion.
"When we get the non-farm payrolls [on] Tuesday, the focus may shift to 'what is the Fed going to do with its stimulus program' since we've moved away from the whole Washington drama for now," Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York, told Reuters.
Wall Street soared to a record last week, spurred by the last minute accord to reopen the government and lift the debt ceiling until the New Year.
In the past five days, the Standard & Poor's 500 Index gained 2.4 per cent, while the Dow Jones Industrial Average climbed 1.1 per cent, and the Nasdaq Composite Index jumped 3.2 per cent. The S&P 500 finished the session at a record close of 1,744.50 on Friday.
"Truthfully most of this is the market pricing in the high likelihood that there will be a continuation of monetary policy through the (Northern Hemisphere) spring," Jeff Buetow, chief investment officer at Innealta Capital in Austin, Texas, told Reuters.
On Monday, Chicago Federal Reserve Bank President Charles Evans is scheduled to give an interview on CNBC, and he can be expected to be asked when he thinks the central bank should start to pull back.
Aside from the jobs report, investors will get a flood of additional data this week.
Statistics include the Chicago Fed national activity Index and existing home sales, both due Monday, the Richmond Fed manufacturing index, due Tuesday, import and export prices, and the FHFA house price index, due Wednesday, jobless claims, PMI manufacturing index flash, new home sales, and the Kansas City Fed manufacturing index, all due on Thursday, as well as durable goods orders and consumer sentiment, due Friday.
Meanwhile, corporate earnings will also provide plenty of direction about the outlook.
On Friday, shares of Google surged 13.8 per cent to US$1,011.408, a day after reporting a surge in net revenue from its internet business. At least 16 brokerages raised their price targets on the stock.
"It's not complicated," Martin Pyykkonen, an analyst at Wedge Partners in Greenwood Village, Colorado, told Bloomberg News. "This is a story that is a proven business model. The bottom line is this is a great growth stock."
Netflix, set to release its latest earnings on Monday, and Apple, set to unveil its new iPads on Tuesday, will likely perform like Google because they are new tech companies as well, Daniel Morgan, senior portfolio manager at Synovus Trust Company in Georgia, told Reuters.
Among the other companies reporting their latest results this week are Texas Instruments, McDonald's and Halliburton on Monday, followed by Travelers, Novartis, and Delta Air Lines on Tuesday. Next up are AT&T, Boeing, Bristol-Myers, and Caterpillar on Wednesday, then Ford, Dow Chemical, and Raytheon on Thursday, and finally Procter & Gamble and UPS on Friday.
In Europe, the Stoxx 600 Index gained 2.2 per cent in the past five days.