Bank of America stated that only "Goldilocks" data can keep long-term interest rates below 5%, stabilize interest rate sensitivity, and prevent the Nasdaq's leadership from wavering. "Explosive" data could lead to a decline of about 4% in the S&P 500 Index to 5,666 points.
Too many job openings? Stocks drop. Too few job openings? Stocks still drop. The US stock market needs a "Goldilocks" employment report.
Tonight, the US non-farm payroll report for December will be announced, and this data has become the focus of Wall Street's attention. Traders and analysts warn that if the data deviates significantly from expectations, it could trigger a stock market decline.
Wall Street analysts say the market needs a "just right" employment report.
Previous articles pointed out that the Wall Street consensus expects an increase of 0.165 million jobs, a decrease from the previous value of 0.227 million.
Goldman Sachs stated that if the employment data exceeds 0.2 million, it will lead to a drop of about 1% in the S&P 500 Index. JPMorgan believes that if the employment data exceeds 0.22 million, the S&P 500 Index could drop by 0.5% to 1%.
If the data is disappointing, with new job additions insufficient at less than 0.1 million, then the stock market may also face a similar magnitude of decline. Goldman Sachs believes the "best point" for the US stock market might be new job additions between 0.1 million and 0.125 million.
Bank of America strategist Michael Hartnett stated:
Only data akin to the "Goldilocks" scenario can keep long-term interest rates below 5%, stabilize interest rate sensitivity, and prevent the Nasdaq's leadership from faltering. "Explosive" data could result in a drop of about 4% in the S&P 500 Index to 5666 points.
Recently, due to the Federal Reserve hinting at a potential slowdown in rate cuts in 2025, U.S. stocks have experienced significant volatility. On Tuesday, the U.S. Services Price Index reached a new high since early 2023, causing the stock market to lose momentum.
The sell-off of major technology stocks has put heavy pressure on Wall Street trades, with the S&P 500 Index dropping more than 1% and a larger decline in the NASDAQ 100 Index. NVIDIA's stock price fell by 6.2%, while U.S. Treasury yields rose across the board, with the 30-year Treasury yield reaching its highest level since 2023.
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