After Friday's Rebound, One Of Goldman's Biggest Bears Capitulates: "I Am Officially Ready To Stop Fighting It"

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by Tyler Durden
Sunday, Dec 04, 2022 - 02:00 AM

Heading into Friday's payrolls report, the biggest concern among Wall Street strategists was how the market would react to a big miss in the NFP print, and related to that - whether we had reached a point where bad news for the economy would now become bad news for the market. This is how Goldman trader John Flood put it on Thursday in his NFP preview:

what caught my eye today when S&P sold off after ISM miss (49 vs 49.7 expected and now in contractionary territory). Growth/Recession concerns now being talked about more than how much higher rates can go after Powell’s speech yesterday (most investors finally have their heads around a 5%ish terminal rate that will be sticky for at least the majority of next year).

Yet while there was disagreement over whether a sub-zero payrolls print would hammer stocks, there was one thing most were in agreement on: a solid jobs print, or a beat for that matter, would certainly hammer stocks as it would suggest that any Fed "pause" narrative was premature. This is how Flood laid out his market reaction matrix: