Heading into tomorrow’s report, economists are expecting an increase in payrolls of 180K, which would be a sizable decline from April’s much stronger than expected reading of 263K. In the private sector, economists are expecting an increase of 172K, which represents a 64K decline from last month’s reading of 236K.  The unemployment rate is expected to remain unchanged at 3.6%.  Average hourly earnings are expected to grow at a rate of 0.3% versus last month’s 0.2% reading last month.  Finally, average weekly hours are expected to show a slight increase to 34.5 from 34.4.

Ahead of the report, we just published our eleven-page preview of 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 April.  We also include a breakdown of how the initial reading for April 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 top performing stocks on days when NFP beats expectations, seven sectors are represented, but Consumer Discretionary leads the way with six stocks. Mattel (MAT), soon to be booted from the S&P 500, has been the best performing stock with an average gain of over 2%. In terms of consistency, Alexion Pharma (ALXN) and Netflix (NFLX) have seen gains over 80% of the time.

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

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