Tags: Goldman | Jobs | Stock | Rally

Goldman’s Jim O'Neill: Good Jobs Report Would Fuel Long-Term Stock Rally

Monday, 05 March 2012 02:03 PM

A surprisingly healthy jobs report for February could spark a longer-term rally in the stock market, as still-cautious investors would open up to the notion that the economy is finally on the mend, says Goldman Sachs Asset Management Chairman Jim O’Neill.

Unemployment figures have surprised on the upside for December and January.

"I think after the two past highly positive surprises, a third one coming up this Friday, I would have thought, would have made a lot of people start to rethink some of their cautiousness about the U.S.," O'Neill tells CNBC.

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"If we get another positive surprise, that raises the possibility of another material rally in the S&P before we get into some of the usual late spring, early summer issues."

Oil prices will serve as the main headwinds battling markets, as the European debt crisis will work itself out, O'Neill adds.

Prices tend to spike in spring and early summer.

"Most of the other concerns people talk about, particularly the ones related to Greece, I find a bit tedious. Markets come through all those challenges pretty easily," O'Neill says.

"I think as we saw a reminder of last year and we've seen repeatedly, when oil prices rise persistently, they usually end up causing quite a bit of damage."

Unemployment rates currently stand at 8.3 percent, and although improving, they remain well above pre-recession levels.

Other experts agree that continued improvements to the rate will keep stocks rising.

"The rally will continue as long as better economic information continues. The question is, 'Are we seeing some sustainable improvement in the economy?' I think the answer is 'yes,' so I think there is going to be some continuation in the rally," says Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management, in Champaign, Illinois, according to Reuters.

The S&P 500 index is up 9 percent on year while the Dow Jones Industrial Average is up 7 percent.

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Monday, 05 March 2012 02:03 PM
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