NFP SCENARIO ANALYSIS – Market Intelligence Note  

Feroli’s complete NFP preview forecasts 75k jobs added, with the unemployment rate (U.3) holding steady at 4.4%. Average Hourly Earnings are expected to rise by +0.3% MoM and +3.6% YoY.  

The following scenario analysis represents a trading desk perspective from JPM US Market Intelligence and is NOT a product of JPM Research:  

- [5%] Above 110k: SPX declines 0.5% – 1%  

- [20%] Between 90k – 110k: SPX gains 0.25% – 1%  

- [40%] Between 60k – 90k: SPX gains 0.25% – 0.75%  

- [30%] Between 30k – 60k: SPX fluctuates between losing 0.25% and gaining 0.5%  

- [5%] Below 30k: SPX declines 0.5% – 1.25%  

Options Pricing: For options expiring February 11, the market is pricing a ~1.2% move as of market close on February 6.  

US Market Intelligence on NFP: Real-time data suggests slightly higher downside risk, though an in-line print could stabilize markets after recent turbulence. The unemployment rate remains the key factor due to the notable slowdown in population growth. While real-time NFP break-evens cannot be directly observed, estimates place it at ~30k jobs versus ~250k in 2023.  

A drop in the unemployment rate would likely boost stocks, contingent on yield curve adjustments. As of Friday’s close, the bond market is pricing ~55bp of rate cuts this year. A Goldilocks print—neither too hot nor too cold—may support markets. However, an overly strong report could lead to yield curve repricing and elevated bond volatility, negatively impacting stocks. Conversely, a weaker-than-expected print may raise concerns about the Fed being slow to resume easing, with Powell unlikely to cut rates before his term ends. This suggests the first rate cut may not occur until June.