Heading into Friday’s Non-Farm Payrolls (NFP) report for February, economists are expecting an increase in payrolls of 197K, which would be a 30K decline from last month’s stronger than expected reading of 227K. In the private sector, economists are expecting an increase of 195K, which would be an even larger decline of 42K from January. The unemployment rate is forecasted to fall to 4.7%. Growth in average hourly earnings is expected to rebound back up to 0.3% after last month’s disappointing print of 0.1%, while hours worked is forecast to remain unchanged at 34.4.
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 February 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 25 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. Leading the way higher, shares of Qorvo (QRVO) have seen an average gain of 2.12% with positive returns between the bells 81.8% of the time. Behind QRVO, 13 other stocks have seen average gains of more than 1%, including relatively well-known names like Skyworks (SWKS), Viacom (VIAB), Charles Schwab (SCHW), and Urban Outfitters (URBN). Another name that has done well and seen consistent upside on better than expected Non Farm Payrolls days is Albemarle (ALB), which has been up from the open to close 91% of the time. ALB is a chemical company that has shown up on the radar of many traders as a lithium play on increased use of batteries in electric vehicles and other applications.
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!