Heading into Friday’s Non-Farm Payrolls (NFP) report for October, economists are expecting an increase in payrolls of 310K, which would be a huge improvement from last month’s decline of 33K.  If expectations are met, it would be the strongest month for job creation since October 2015 and the biggest month over month increase (+343K) since September 1997!  Obviously, a lot of that rebound is related to the bounce-back from the hurricanes, but anytime you are talking about the biggest move in twenty years, it’s impressive.  In the private sector, economists are expecting a similar increase to 301K from last month’s level of –40K, but even with the improved job creation numbers,  the unemployment rate is expected to remain unchanged at 4.2%.  Growth in average hourly earnings is expected to slow back down to 0.2% from last month’s 0.5%, while the average workweek should remain at 34.4 hours per week.

Ahead of the report, we just published our eleven-page monthly preview for the October jobs report.  This report contains a ton of analysis related to how the equity market has historically reacted to the monthly jobs report, as well as how secondary employment-related indicators we track looked in October.  We also include a breakdown of how the initial reading for October typically comes in relative to expectations and how that ranks versus other months.

One topic we cover in each month’s report is the S&P 500 stocks that do best and worst from the open to close on the day of the employment report based on whether or not the report comes in stronger or weaker than expected. In other words, which stocks should you buy, and which should you avoid?  The table below highlights the best-performing stocks in the S&P 500 from the open to close on days when the Non-Farm Payrolls report has been better than expected over the last two years.  Of the 25 top performing stocks on days when the NFP beats expectations, six sectors are represented, with Energy and Technology both leading the way with seven.  Leading the way to the upside, Hewlett Packard Enterprises (HPE), Vornado (VNO), and Qorvo (QRVO) have seen average open to close gains of over 2%.  In terms of consistency, Urban Outfitters (URBN), Skyworks (SWKS), Autodesk (ADSK), and Albermarle (ALB) have been in the black 92% of the time.

For anyone with more than a passing interest in how equities are impacted by economic data, this report is a must-read.  To see the report, sign up for a monthly Bespoke Premium membership now!