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That question will be progressively answered this week with a raft of economic data ahead out of the US but the real mother of economic revelations will be the jobs report out on Friday.

The prime movers overnight for the New York Stock Exchange was a solid ISM manufacturing report and, believe it or not, European banks coming in with better than expected profits.

The scoreboard

The S&P 500 was up 2.2 per cent to close at 1125.86. Another strong sign for the outlook for the global economy was oil closing up and over $US81 a barrel.

To be precise, the manufacturing reading from purchasing officers at US factories fell from 56.2 in June to 55.5 in July but this was better than the guess by economists, who were tipping 54.

Construction spending rose 0.1 per cent in June. Remember, any reading over 50 means US manufacturing is growing.

Euro-news

On the Euro-bank front, BNP Paribas, France’s monster bank came in better earnings than expected and HSBC also surprised the market with a bullish report, which included reference to the lowest bad debts since the GFC started.

Even European manufacturers have added to the positive picture. Maybe, just maybe, the doomsday merchants exaggerated how bad the global economy was affected by the European debt drama.

Regular readers know that this has been my position for a hell of a long time.

What’s ahead?

Keeping this in perspective, the Fed boss, Ben Bernanke, said overnight that housing and jobs have to kick in to make the recovery sustainable but that doesn’t mean it won’t happen. It could just be a bit more drawn out than we would like.

Let me be frank — if US corporate earnings and business investment weren’t giving me hope I would be warning to batten down for some tough times on the market ahead.

I still expect volatility — which is code for challenging times ahead with ups and downs but my crystal ball, which has been pretty good for past couple of years, says we will be up for the calendar year by more than what you can get for a one-year fixed deposit, which is around six per cent.

And I also would bet that the S&P/ASX 200 will return better — including dividends — than Westpac’s attractive 7.05 per cent for five years.

That’s why I fight the bull’s fight on a daily basis. It’s what long-term investors have to go back to when the short-term traders take control and chase profits.

Good year for Coke?

By the way, an artcile in Barron's tipped Coca-Cola to have a good year ahead in the US. See if this article affects the local company today. I know we grew up with the line — “Things go better with Coke” — but age and wisdom has taught us that beer, wine and even water could be better options.

However, the Coke company here, CCA, has covered most bases with beer and water important assets.

Let’s hope by the end of the week we can be using these products to celebrate a good five-day run on the market.

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.