Jobs, inflation and Egypt

Fundamentals and nasty surprises are on investors minds heading into February, with big tests in the coming week about jobs and inflation and increasing worries over Egypt and its region.

The latter has already hit oil prices and has started to rattle equities. U.S. crude oil futures ended more than 4 percent higher Friday, on concerns the civil unrest in Egypt could spread and threaten stability in the Middle East.

Overall, however, the first month of the year has been a good one for investors willing to take on some risk.

Until Friday’s sell off, global equities were gaining at a rate that would have produced one of the best years in the past four decades.

Assets such as short-term high-yielding bonds have also been in favor, while supposedly safe-haven developed market sovereign debt has suffered.

This is all based on a consensus that arose toward the end of last year that leading developed economies — the United States, the euro zone and even Japan — were likely to become more dynamic.