The end of this stock market anxiety, where many investors are worried that we could see more big sell-offs, has been (to quote “The Boss” aka Bruce Springsteen) born in the USA. The Fed’s aggressive interest rate rises to beat inflation that topped 9% has taken the US stock market down about 22% since New Year’s Eve! Our market is off only 10.18% but on Tuesday, it was more like 15%!

Stocks have risen for three days in a row on some better-than-expected inflation news in the US and here, adding over 5.5%, giving us a sneak preview of what might happen if the data drop over the next six days comes out better than expected.

The first drop comes overnight in the US, with the latest jobs report for September set to be an important test for the overall share market. The first number the experts will look at will be jobs created. If it’s less than 240,000, stocks could spike higher. The lower the result, the higher stock prices could surge.

Then there’ll be a deeper analysis of other aspects to the report, such as the jobless rate, hours worked, wages paid, etc. Here the experts will want to be able to guess if the report is pointing to falling inflation in the USA.

While our market is likely to take the lead from Wall Street overnight (which was negative ahead of tonight’s numbers), Monday’s trading here will be driven by what we see tonight from the US labour market statistician.

Guessing our economic future is just that – guesswork! Some economists expect the interest rate rises here will eventually come with a thud, which is why Dr Phil Lowe has tried a 0.25% rate rise this week rather than the expected 0.5%. There’s no reliable formula for working out the impact of rate rises and how long they take to really hit the economy, including who they hit.

Those overborrowed and feeling the six rate rises in a row since May, might be planning to ‘scrooge’ their Christmas spending, but Coles boss Steve Cain is expecting a bumper festive season.

Apart from the fact that only a third of people have mortgages and many of them had borrowed at 5% or more before the pandemic and then refinanced at 2-3% or so during the Covid time, only a relatively small numbered are really mortgage stressed from being overborrowed.

Another third of Aussies own their own home. Another third rent. Rents haven’t risen for most of these people because their lease mightn’t have expired yet. After Christmas, many will cop it. That’s when the rate rises will hit retail spending more, but Cain is expecting open wallets and purses for December this year.

A lot of his thinking is linked to the fact that we were still coping with lockdown effects last year. “When we did our Christmas research, there were about 10 per cent of customers who said this Christmas is going to be bigger and better than last year because there’s more mobility. We were still in a fair bit of lockdown or restricted travel or fewer planes and all the rest last December,” he told the AFR’s Carrie LaFrenz.

Last year, the best gift you could get was a RAT test so you could fly interstate. How life has changed! Statisticians must pick up these changes to guess how an economy is going. As you can see, there are a lot easier things to get right.

The one I really want the US statistician to get right is the inflation number next Thursday. I want that to show a nice drop in the inflation rate. If it does, stocks will fly and the glory days of a rising market will return.  However, if the number remains stubbornly high, they’ll sink like a stone and we’ll be dancing in the dark waiting for better data to turn around sentiment and share prices.

I’m hoping the data will be good for stocks but it might be still too soon as this US expert thinks. “Once again, investors are looking for bad news to be good news,” Chris Senyek of Wolfe Research wrote in a Thursday note, adding that even if the September report is lower than expected, wage growth will likely hold up and make a pivot from the Federal Reserve unlikely, CNBC reported.

“While stocks are currently prone to big upside rips, we strongly believe that our intermediate-term bearish base case remains intact,” he added.

Because the mix of rate rises and inflation isn’t easy to be certain about, I have no confidence that the worst is behind the US, when it comes to inflation. But one day it will and stocks will soar. I can only hope the jobs and inflation numbers over the next six days puts us closer to that day for the sake of our super funds, our investments and being able to rule out a recession in 2023.

I love the song “Dancing in the Dark” but I prefer to believe “I’m on Fire” with “My Hometown” preoccupation of picking stocks that are set to go higher! And lower inflation and less interest rate rises will be a big help.