The rebound in equities continued on Tuesday with the S&P 500 moving about a half of a percent to the highest level in over 6 weeks. The move was driven by another round of economic data that shows rising home prices, rising consumer confidence, and near-record levels of job openings. The caveat for investors, however, is that the week's key economic reports are still due out and the price action on Tuesday was dubious at best.

On the economic front, the monthly labor data is due out this week starting with today's release of the ADP report. the report should show another month of strong job creation which is a two-edged sword for the economy. Improved employment is a definite benefit to the economy but is ultimately driving wage inflation and there is inflation data due out this week as well. The PCE price index is expected to show another acceleration in YOY inflation and we will not be surprised to see it come in hotter than the analysts are expecting.