Goldman trading expert says a new dynamic is coming to the payroll report

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By journalsofus.com


It was the day before parole, when not a single possession was stirring in the entire house, not even a mouse. (For the sake of poetic license we will ignore movements in Japan; more on that later.)

It is worth reviewing how the market has reacted to the jobs numbers this year. In the early part of the year, the good news was bad news – strong jobs growth spooked the market, leaving it worried about more rate hikes. However, this has not always been the case – notably, in the report released in October, when the other section of the report (average hourly earnings) was more bond friendly.

Economists polled by the Wall Street Journal expect nonfarm payrolls to increase by 190,000 — remember, the increase will be fueled by the return of auto workers — with an unchanged unemployment rate of 3.9% and a 0.3% increase in average hourly earnings. .

John Flood, a managing director at Goldman Sachs who works in its trading business, says there is a “new dynamic” in that the market will dislike extreme outcomes in either direction.

A rise above 250,000 would trigger a selloff of at least 0.5% in the S&P 500 SPX, he said, but less than 50,000 would result in a gain. He says the best-case scenario would be an increase of between $50,000 and $150,000, which would yield at least a 1% gain.

That said, there’s always a possibility that some other element of the jobs report could make headlines. It’s “worth noting that our best macro people think the unemployment rate is the most important part of Friday’s report.”

The unemployment rate has already risen half a point from its lowest level. Note that the Sahm Rule recession indicator occurs when the three-month average of the unemployment rate is at least half a point above its three-month minimum over the past 12 months, and the latest reading is 0.33%.

It would take a particularly big jump in the unemployment rate to 4.3% to trigger the panic rule with Friday’s report, although it looks like recession indicators will begin early next year.

Market

Japanese shares JP:NIK fell and the yen

USDJPY

Comments from Bank of Japan officials on Thursday raised hopes that the country could exit its decades-old negative interest rate policy as early as next week. Furthermore, stock futures

ES00

NQ00

inches high, oil

chlorine

was around $70, and the 10-year BX:TMUBMUSD10Y was at 4.15%.

For more market updates and actionable trading ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

buzz

alphabetical

Google

Google launched Gemini, a new artificial intelligence model that will be included in its Bard chatbot and its Pixel 8 Pro smartphone.

Advanced Micro Devices

amd

New chips launched for AI use, which may be the first challenge for Nvidia

NVDA,

AbbVie

abbv

Said it was going to buy Cerevel Therapeutics

cere

In a deal worth $8.7 billion.

Gamestop

GME

Revenue missed expectations in the third quarter, as the videogame retailer said it would be able to invest in shares managed by new Chairman and CEO Ryan Cohen.

jetblue airways

JBLU

Shares rose after the airline raised its outlook.

McDonald’s

Delhi Municipal Corporation

The CosMc spinoff will launch this month.

Initial jobless claims rose from 1,000 to 220,000. Consumer credit data will be released today.

best of the web

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UFC owners pay themselves millions every year.

Crypto exchange co-founder pleads guilty to US charges and will dissolve exchange

top ticker

Here were the most active stock-market tickers on MarketWatch as of 6 a.m. ET.

anchor

security name

TSLA

Tesla

GME

Gamestop

NVDA

NVIDIA

NIO

NIO

amc

amc entertainment

AAPL

Apple

amd

Advanced Micro Devices

PLTR

Palantir Technologies

AMZN

Amazon.Com

mlgo

microalgae

chart

According to analysts at Vanda Research, retail investors have been buying stocks — which is unusual for this time of year. “This has helped small-cap names outperform big tech, especially those stocks associated with the crypto and software/AI space,” say analysts identified by Marathon Digital.

hit,

riot platform

riot

and Coinbase Global

coin

Among the crypto names being bought, along with other companies including PDD Holdings

PDD,

working day

WDAY

and snowflake

Ice,

random reads

Brenda Lee can’t get more money than her No. 1 hit, “Rockin’ Around the Christmas Tree.”

“Person of the Year” – Taylor Swift’s cat makes headlines.

A woman has been sentenced to work at a fast-food restaurant after throwing a burrito bowl at an employee’s face.

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