Investors are approaching the week with “itchy trigger fingers”, according to chief investment strategist for Northern Trust, Jim McDonald. After last week’s housing and manufacturing data checked the market’s 7-month advance, the pits are wary going into a week set to be dominated by more reports on leading economic indicators.

The Labor Department’s monthly report due out Friday will be paramount to many, addressing concerns over unemployment. Compounding the uneasiness will be reports on industrial output, pricing, consumer confidence, factory orders and construction spending. Investors will also be watching for new outlooks in anticipation of 3Q earnings data next month, which should indicate the relative health of companies.

Last week’s losses were chalked up to poorer-than-expected performance in commodities, home sales and durable goods orders. The DJIA, S&P and NDAQ were down roughly 2% by week’s end, despite encouragement from the Fed and a seemingly rosy unemployment report showing job losses slowed for August. Last week’s downturn may also be an expression of a trend where prices decline in the month leading up to the release of earnings reports, as they did in the second quarter this year.

Concerns loom about the artificial liquidity created by the Fed, and the withdrawal of its stimulus programs. Even though the Fed has kept the interest rate low and indicated it would do so for the foreseeable future, the first-time home buyer credit expires in November and the Fed is also scaling back two emergency lending programs.

With unemployment at 9.7 percent and a projected ceiling of 10, many analysts are warning that the market’s gains since the 12-year low in March could be offset substantially when the Fed withdraws its stimulus. Tyler Vernon, portfolio manager for Biltmore Capital Advisors, suggested that the market was in a position of high liquidity but had “run ahead of its fundamentals”. Nevertheless, the market seems to be adapting to the unemployment environment and analysts are counting on capital injections by bench-warming investors who don’t want to miss out on a rally.

Despite looming game changers later in the week, the European markets opened up Monday morning to round out an approximate 0.50% gain by midday, while Asian markets declined slightly.