"It's just going to be a flood of news coming out," said Colin Cieszynski, chief market strategist at CMC Markets.
"It will be interesting to see (if) the markets can build on that. (Or) are the markets just going to top out again and come back down?"
Traders will digest the latest reading on U.S. manufacturing and factory orders and find out if the European Central Bank plans more stimulus aimed at staving off recession in the eurozone. Canadian data includes manufacturing shipments.
And at the end of the week, employment data for the U.S. and Canada will be released.
Meanwhile, it's a heavy week for earnings, with reports from heavyweights including Talisman Energy (TSX:TLM), TransCanada Corp. (TSX:TRP), Enbridge (TSX:ENB), insurers Sun Life (TSX:SLF) and Great-West Lifeco (TSX:GWO), Tim Horton's (TSX:THI), Air Canada (TSX:AC.B) and Canadian Natural Resources (TSX:CNQ).
The TSX ended last week ahead 69 points or 0.5 per cent as stocks continue to claw back some of the losses racked up during a sell-off that peaked mid-October.
The Dow industrials fared much better, gaining 585 points or 3.5 per cent and actually ending the week at a new record high.
But the Toronto market is weighed down by the resource sector, with the gold component in particular taking a hammering last week. It lost a good 15 per cent as bullion prices fell sharply in the wake of the U.S. Federal Reserve's announcement that it would end its massive bond purchases, or quantitative easing, at the end of October.
The showing last week left the Toronto market down 7.25 per cent from its early September highs, although still ahead 7.1 per cent year to date.
Cieszynski said it will be tough for the Toronto market to improve on its performance because of weakness in the commodity sectors. The energy sector has also been losing ground as oil prices try to find a floor around US$80 a barrel amid lower demand and rising supplies.
South of the border, Cieszynski said that with New York indexes recovering all or most of the losses sustained during the fall retracement, it's tough to see a catalyst that would lift these markets further.
"We’ve already had the rally in the last couple of weeks," he observed.
"The U.S. isn’t stimulating any more, the earnings are OK but they’re not a total barn burner and there have been enough misses that you have to wonder — and the longer you wait, the closer the interest rate hikes come (from the Fed)."
On the economic front, traders are particularly anxious to see how job creation held up in Canada and, especially the U.S., in October.
U.S. job growth has been pegged at 228,000, slightly lower than the September gain of 248,000 with the jobless rate holding steady at 5.9 per cent.
At the same time, markets may be at a point where good economic data can be viewed in a negative light as it raises concerns that the Fed could act on upping interest rates sooner than thought.
"That’s kind of the environment that I think we are in right now," said Philip Petursson, director of institutional equities at Manulife Asset Management. "It's a guessing game as to how is the Fed going to view this data."
But he also pointed out that the Fed has a problem in raising rates. While it would like to raise rates closer to more historic norms, economic weakness in the rest of the world makes this difficult.
"Just imagine the reaction in the currency markets if the Fed indicated they were going to start raising rates when the rest of the world was cutting. That actually hurts U.S. businesses — 46 per cent of S&P 500 earnings come from outside the U.S. so this is a headwind."
Meanwhile, in Canada, data is likely to show that job growth stalled in October following the huge 74,000 gain in September. Economists looked for the economy to have shed about 8,000 jobs in October, but the jobless rate should stay unchanged at 6.8 per cent.