JP Morgan says a big miss, or beat, on the US jobs report (NFP) could flip the narrative

This one's a little out of left field. Via a note from JP Morgan training desk that warns of the risk of 10% drop in the benchmark US equity index over the summer months in the US:could test 5,00potentially fall to around 4,800.The three catalysts:Buyers become exhausted "The combination of earnings season stock performance and narrowing market breadth points to a market that needs a new set of catalysts and/or reassurance about the prevailing market narrative," in-line macro data, along with a wary Federal Reserve could drive investors to the sidelinesAn unwind of buying momentum:momentum ... If that falters, it would trigger a larger ... unwind ... a chain reaction could lead to a 5% - 10% pullbackDisappointing, or surging, macroeconomic data:a re-emergence of a stagflation or recessionary narrative that threatened hopes of a soft landing would drive equities downJPMorgan says the NFPO due today, if its below 75,000, or above 300,000, could spark that narrative changeTake all this with a grain of salt. Place in the 'worst case' basket. Sure, not out of the question. The first seems the likeliest with Q2 earning season approaching in July.---JPM bear here:JPMorgan's Kolanovic says the resurgence in meme-stocks is a bad sign for stock marketGoldman Sachs bull here:Goldman Sachs sees a “wall of money” pouring into the US equity market in Q3ps. NFP previews:Deutsche Bank's Back To The Future NFP preview, longest low unemployment run since 1950sUS jobs numbers due Friday - Non-farm payrolls preview This article was written by Eamonn Sheridan at www.forexlive.com.

Jun 7, 2024 - 06:20
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JP Morgan says a big miss, or beat, on the US jobs report (NFP) could flip the narrative

This one's a little out of left field. Via a note from JP Morgan training desk that warns of the risk of 10% drop in the benchmark US equity index over the summer months in the US:

  • could test 5,00
  • potentially fall to around 4,800.

The three catalysts:

Buyers become exhausted

  • "The combination of earnings season stock performance and narrowing market breadth points to a market that needs a new set of catalysts and/or reassurance about the prevailing market narrative,"
  • in-line macro data, along with a wary Federal Reserve could drive investors to the sidelines

An unwind of buying momentum:

  • momentum ... If that falters, it would trigger a larger ... unwind ... a chain reaction could lead to a 5% - 10% pullback

Disappointing, or surging, macroeconomic data:

  • a re-emergence of a stagflation or recessionary narrative that threatened hopes of a soft landing would drive equities down
  • JPMorgan says the NFPO due today, if its below 75,000, or above 300,000, could spark that narrative change

Take all this with a grain of salt. Place in the 'worst case' basket. Sure, not out of the question. The first seems the likeliest with Q2 earning season approaching in July.

---

JPM bear here:

Goldman Sachs bull here:

ps. NFP previews:

This article was written by Eamonn Sheridan at www.forexlive.com.
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