Market Wrap: Nasdaq Leads Late-Day Push

The market finished on a solid note today, ahead of tomorrow's widely anticipated employment report. There has been a lot of chatter that the number will be weaker than consensus. While that could hit the market short-term, I think the fact that it is being widely expected increases the prospect of a weak number already being priced in.

The dollar was higher today, as the euro lost ground. This weighed on commodities a bit, while financials stocks led the rally for a chance. The euro was unable to continue its bounce, despite both the ECB and Bank of England holding their target lending rates steady.

In economic news, the pending home sales report was weaker than expected (-7.6%), but this could have been weather related. Factory orders were solid, +1.7%. But the most bullish report was the final Q4 productivity report which showed an increase of +6.9%, and a veritable plunge in unit labor costs by -5.9%. With labor costs making up the largest component of inflation, I continue to believe that inflation pressures will remain subdued for quite some time.

Retailers were also strong today after a raft of better-than-expected same-store sales results for February. Most people remain bearish on the retailers due to the negative stories you hear in the media about the cash-strapped U.S. consumer. But look at the retail ETF (XRT) - its breaking out to new highs all week. I like that.

I also liked the action in Goldman Sachs (GS) today. GS is a barometer not just for the financial sector, but investor confidence as well. Today, GS broke above its 50-day average on strong volume. If it can reverse its recent downtrend, I think it will help change the tone of the overall market to the good.

long GS, XRT