In the post-COVID era, the sensitivity of the US stock market to economic data is extremely high, exhibiting significant fluctuations in response to both bullish and bearish surprises in the data. However, with Trump's election, this situation may soon change, as his administration will bring a high level of uncertainty, making the policies of his new government potentially more important than the macroeconomic data that dominates Wall Street's activities.

On Friday, this notion will face its first test - the non-farm payroll report for November will be released that day. In this regard, bank of america advises market participants to act cautiously when evaluating, as the data contains noise.

Ohsung Kwon, a stocks and quantitative strategist at bank of america, stated in a report on Tuesday, "In the post-pandemic era, the market's reaction to macro data has never been so intense. Why? This may be a result of high volatility, high forecasting difficulty, and the Federal Reserve's 'data-dependent' stance, but will the situation change if tariffs and unexpected policy announcements become the primary macro drivers of stock volatility?"

He added that Trump has indicated plans to implement a tougher and broader tariff policy than during his first term. For example, using tariffs to compel Canada and Mexico to control the influx of immigrants into the USA, rather than solely for economic reasons.

From the options market perspective, traders expectnon-farm payroll datato lead to a bidirectional response in the stock market of about 0.86 percentage points, which Kwon referred to as "mild," and also the lowest level since July. He said, "We are paying attention to this."

As with the report in October, the bank of america expects that the data from the non-farm employment report will have noise due to storms in the southeastern region and $Boeing (BA.US)$the impact of the company's strikes. The company expects that the usa will add over 240,000 new jobs in November, exceeding market consensus, with 100,000 job additions resulting from the waning effects of storms and strikes. Compared to bank of america's prediction, the market predicts that the usa will add 195,000 new jobs in November, up from 12,000 in October.

In this regard, bank of america warns that in light of the severe revisions made previously,Non-farm employmentbank of america stated, "We recommend a cautious stance towards the initially published data and, after collecting more data, place more trust in the data after the first and second revisions."

Regarding the Federal Reserve, the market expects that the Federal Reserve will cut interest rates again after the meeting on December 18. However, bank of america stated that if the CPI data released before the meeting shows another large month-on-month increase, "the Federal Reserve may find it difficult to continue lowering rates."

Editor/Rocky