Heading into Friday’s Non Farm Payrolls (NFP) report for April, economists are expecting an increase in payrolls of 190K, which would be a 92K gain from last month’s much weaker than expected reading of 98K. In the private sector, economists are also expecting an increase of 190K, which would be an even larger increase compared to the headline reading. The unemployment rate is forecasted to tick up to 4.6%. Growth in average hourly earnings is expected to accelerate to 0.3%, while average weekly hours worked is also forecast to rise to 34.4.
After last month’s disappointing report, the April report is important as it will shed some light on whether March was an anomaly or the beginning of a new trend. With such high stakes surrounding the report, the market will likely have a big reaction to the upside or downside based on how the number comes in relative to expectations. To that end, we just published our eleven-page monthly preview for the April 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 September. We also include a breakdown of how the initial reading for September 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, eight sectors are represented, as Consumer Discretionary and Technology both lead with six each. Technology, though, is clearly the leader with the four top performing stocks, including Qorvo (QRVO) which has seen an average open-close gain of 2.66% and positive returns every time. Other consistent winners have been AVGO, SWKS, ADSK, URBN, KMX, and ALB.
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!