The equity market's winning streak continued on Wednesday with the S&P 500 gaining 0.8% on the back of a successful austerity vote in Greece, better-than-expected pending home sales data, and quarter-end buying activity.  That move left it up 3.1% for the week.

At its current level, the S&P 500 is down 4.6% from its intraday high (and 52-week high) on May 2.  All things considered -- and there is a lot to consider -- that qualifies as a remarkably resilient stance considering the S&P 500 had risen 31% between Aug. 26, 2010, and the intraday high on May 2.

One will need 1.21 gigawatts to get back to Aug. 26, 2010.  Unfortunately, those gigawatts and a good flux capacitor aren't available, so we're stuck with the written history that indicates that was the day before Fed Chairman Bernanke floated the idea of asset purchases (read: QE2) in a speech he gave at the Fed symposium in Jackson Hole.

Notwithstanding our time travel limitations, we are going back to the future today in a certain sense as June 30 marks the official end to the QE2 program.  It also marks the end of the second quarter.

Entering today's session, the S&P 500 is down 1.4% for the second quarter, so the rally we have seen so far this week has helped repair a good bit of the damage that was done with the unfolding of political/social unrest in the MENA region, the Japan earthquake, the Greek debt crisis, a spike in oil and gas prices, a slowdown in China, growing political rancor in the U.S. over the debt ceiling and budget deficit, and signs of weakening in global economic activity.

We said earlier there has been a lot to consider and there you have it.

There is no rest for the weary, however.

Soon the third quarter will begin and many of those same issues will travel with the market, perhaps though not at the same frenetic pace they did in the second quarter.  To that end, we noted yesterday that average gas prices, while still high, have declined 10% over the last seven weeks; Greece appears to be on course to receive a second bailout package; and Japan is showing signs of recovery from the March earthquake. 

The debt ceiling debate will heat up as a market focal point as the August 2 deadline nears, but it can quickly cool down and perhaps heat up the major averages if a compromise is reached beforehand.

Another area in need of improvement -- and which would also take some of the pressure off the equity market -- is the labor market. 

Initial claims have levitated above 400,000 for many weeks now without any special factors to account for the uptick.  The latest report didn't show anything different, as claims for the week ending June 25 were 428,000 (Briefing.com consensus 420,000), down a mere 1,000 from the week before.  The 4-week moving average rose slightly to 426,750.

Continuing claims for the week ending June 18 decreased 12,000 to 3.702 mln (Briefing.com consensus 3.700 mln).  That brought the 4-week moving average for the series to 3.703 mln from 3.715 mln.

Although this initial claims report will not factor into the upcoming employment report for June, the persistent levitation above 400,000 will keep expectations for strong, nonfarm payroll growth in check.  Payroll gains in excess of 100,000 are needed to support normal labor force growth and a stable unemployment rate.

The futures market handled the claims data reasonably well.  In fact, S&P futures jumped slightly after their release and are signaling a gain of about 0.4% for the cash market when trading begins. 

The Chicago PMI report for June (Briefing.com consensus 54.0; prior 56.6) will be released at 10:00 a.m. ET and it could be a swing factor insomuch as it influences expectations for tomorrow's ISM Index.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is the Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial please email researchsales@briefing.com.