Wall Street warns: To avoid a sharp decline in U.S. stocks, tonight's non-farm payrolls need to be "just right"
Wall Street warns that the U.S. non-farm payroll report for December, to be released tonight, will have a significant impact on the U.S. stock market. Analysts point out that if the new job creation data deviates from expectations, it could lead to a sharp decline in the stock market. The market consensus is for an increase of 165,000 jobs, with Goldman Sachs and JPMorgan Chase respectively warning that if the data exceeds 200,000 or 220,000, the S&P 500 index could drop by 0.5% to 1%. If the new jobs created are less than 100,000, the stock market could also face a similar decline. Recently, U.S. stocks have experienced increased volatility, especially with the sell-off of large technology stocks
Too many job openings? Stock prices drop. Too few job openings? Stocks still drop. The U.S. stock market needs a "Goldilocks" employment report.
Tonight, the U.S. December non-farm payroll report is about to be released, and this data has become the focus of Wall Street. Traders and strategists warn that if the data deviates significantly from expectations, it could trigger a stock market decline.
Wall Street analysts say the market needs a "just right" employment report.
Previous articles pointed out that the Wall Street consensus expectation is for an increase of 165,000 jobs, down from the previous value of 227,000.
Goldman Sachs stated that if the employment data exceeds 200,000, it would lead to a decline of about 1% in the S&P 500 index. JPMorgan Chase believes that if the employment data exceeds 220,000, the S&P 500 index could drop by 0.5% to 1%.
If the data is disappointing, with job additions falling below 100,000, the stock market could also face a similar magnitude of decline. Goldman Sachs believes that the "sweet spot" for the U.S. stock market may be an increase of 100,000 to 125,000 jobs.
Bank of America strategist Michael Hartnett stated:
Only "Goldilocks" data can keep long-term interest rates below 5%, stabilize interest rate sensitivity, and prevent the Nasdaq's leadership from wavering. "Explosive" data could lead to a decline of about 4% in the S&P 500 index to 5,666 points.
Recently, due to the Federal Reserve hinting at a possible slowdown in interest rate cuts in 2025, the U.S. stock market has experienced significant volatility. On Tuesday, the U.S. services price index hit a new high since early 2023, causing the stock market to lose momentum.
The sell-off of large tech stocks has put heavy pressure on Wall Street trading, with the S&P 500 index dropping more than 1%, and the Nasdaq 100 index experiencing even larger declines. Nvidia's stock price fell by 6.2%, and U.S. Treasury yields rose across the board, with the 30-year Treasury yield reaching its highest level since 2023.
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