The jobs data for the month of June is going to be out tomorrow and investors will likely react to the news in a very polar manner. Non Farm US Job losses have been slowly shrinking each month down from the January highs. If tomorrow’s data proves to be positive, and the trend continues, investors could be influenced to move their money accordingly.

Strong positive jobs data could very well push the Dow up and over recent highs and even into the 9000’s range if the trend were to continue visually. Investor and consumer confidence hinge on the report that comes out tomorrow and it will be interesting to see the exact extent to which both of these groups react to the news. May’s non-farm payroll growth was –345,000 jobs. If June data turns out the be better and more promising, I think we’ll see a real surge by midday and well into the afternoon in US markets. This could mean a pullback from commodities like precious metals and oil in the short term due to the fact that many people are now more heavily invested in commodities as a hedge against an extended economic recession or even a depression. But more jobs means more demand for oil due to more people driving around. So in the end, an economic recovery is great for the price of oil, but not for many other old standby commodities.

If the jobs data proves to be negative tomorrow, commodities could edge higher as the US and world economies react to the idea that the recession could be prolonged due to employment and production stagnation. This would be good for commodities like gold and initially good for oil as well. But decreased demand for oil would hurt the price in the mid to long terms. Either way, negative jobs data will hurt investors betting on a slow but consistent economic recovery.

People with large positions in gold and other commodity stocks as well as those with portfolios heavy in retail will likely be the ones who either benefit greatly from news if it is good or are hurt the most if the jobs data turns out to be worse than expected. No matter what direction the jobs data takes the markets, it’s certainly going to be a key indicator of economic recovery and health and will likely have widespread influence on the markets especially in the short term. People are really looking for a light at the end of the tunnel, and a positive jobs data report could very well create a new light at the end of the current tunnel of recession for many investors.

A good lesson to be learned from the hoopla surrounding tomorrow’s announcement of US payroll performance in June is that it really pays to diversify one’s portfolio. Jobs data is just a small piece of a larger puzzle, and if an investor wants to insulate their portfolio against damage from such a specialized piece of data, it’s best to invest in a wide range of companies, markets, and commodities.