What Will Stocks (& Bonds) Do After Today's Jobs Data?

So will good news be bad news or good news... or will bad news be good news..or bad?

The last few months have reminded us of previous times when the machines lifted stocks no matter what happened with the payrolls print - beat or miss - as asset gatherers and narrative pushers pumped the markets full of 'goldilocks' chatter.

As Bloomberg reports, the Treasury market last month broke a trend of fleeting reaction to U.S. employment reports with a decisive selloff sparked by a bigger-than-forecast increase in average hourly earnings. Of the previous five releases, all but May’s --which President Donald Trump alluded to about an hour before the release -- had little lasting impact.


Full Details (NFP numbers below are as reported at initial release, not as subsequently revised):

August data released Sept. 7: NFP rose 201k vs 190k est.

Treasuries fell, lifting yields across the curve by as much as 8bp (5Y), as average hourly earnings increased 0.4% m/m, double the median forecast; 10Y yield rose as much as 7.5bp and closed higher by 6.6bp
S&P 500 fell 0.2%

July data released Aug. 3: NFP rose 157k vs 193k est.

Market reaction was minimal as smaller-than-forecast payrolls increase was offset by upward revision to June, while 0.3% average hourly earnings increase and 3.9% unemployment rate were in line with forecasts; following bigger-than-forecast drop in July ISM non- manufacturing index and a selloff in Italian bonds that drove gains for core euro-zone and U.K. yields, U.S. 10Y yield closed lower by 3.7bp
S&P 500 rose 0.5%

June data released July 6: NFP rose 213K vs 195k est.

Market reaction was muted as bigger-than- forecast payrolls increase was outweighed by lower-than-forecast increase in average hourly earnings and unexpected uptick in unemployment rate; 10Y yield closed lower by 0.7bp after dropping as much as 2.4bp
S&P 500 rose 0.9%

May data released June 1: NFP rose 223k vs 190k est.

Report showed stronger-than- expected data; comment by Trump on Twitter an hour ahead of the release suggesting it would be strong sparked declines for Treasuries, and move was extended after publication of numbers; losses were pared over the rest of the session, however curve flattening persisted
S&P 500 rose 1.1%

April data released May 4: NFP rose 164k vs 193k est.

Data, which included a smaller-than- forecast 0.1% increase in average hourly earnings and a downward revision to March wage growth number, spurred gains for Treasuries that faded quickly; 10Y yield declined as to be down as much as 3.7bp from prior close, reaching session low within 15 minutes after the data, before rebounding to end the day little changed. Catalysts for reversal included focus on following week’s auctions, expectations for heavy IG credit issuance and gains for U.S. stocks
S&P 500 rose 1.3%

March data released April 6: NFP rose 103k vs 185k est.

Data initially sparked bull steepening of UST curve, however futures volumes in 30 minutes following the release was unusually light for a jobs report day; curve subsequently reversed steepening move as yields shifted lower over U.S. session amid a selloff in U.S. stocks that was spurred by escalating trade tensions with China
S&P 500 fell 2.2%

Today's report for September, to be released Friday at 8:30am ET, is forecast to show a 185k increase in non-farm payrolls, 3.8% unemployment rate and 0.3% m/m increase in average hourly earnings.