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  • Friday’s US jobs report for August is going to be huge. Here’s what to expect

    From cnbc.com

    Wall Street is gearing up for one of the most important economic releases of the year Friday, when the Labor Department puts out a jobs report expected to go a long way in determining the future of Federal Reserve policy. The Wall Street consensus is for nonfarm payrolls growth of 161,000 for August and a slight decline in the unemployment rate to 4.2%, according to Dow Jones. However, recent data, including a massive downward revision to previous counts, has pointed to a sharp slowdown in hiring and has put some downside risk to that forecast. In turn, markets are certain the Fed will start lowering interest rates ... (full story)

NFP will be strong tomorrow!
The big news on jobs all ready came out when it was revised down over 8 hundred thousand jobs. That will influence the Feds decision far more than a single monthly report.
Quoting Vancarbon
Is it really that big of a deal ? There’s already a slowdown, the figures are likely to be ambiguous and subject to revision. Irrespective of the figures the decision to cut is already made . The question is how much and how frequent ? Slow and steady is the preferred route, other alternatives signal panic . Of course the hype is great to keep the over leveraged players on their toes.
The impact isn't so much on what will happen in 12 months, but, rather, what happens near term. The data can be read in multiple ways, but the primary 2 are: A) NFP much better than expected, Fed can cut 25 bps and still hit that soft landing B) NFP is awful, and the market reacts by heightening expectations that the FED should cut 50 bps (which then is only 25 later this month) and cements the idea that the FED is too late to prevent a hard landing/recession.

An in-line number leaves uncertainty and will result in the slow grind downward until we find a bottom.

The over-levered players (I'll include myself in that) were probably playing a directional game until the actual FOMC meeting. Turns out we cannot buy a sustained rally, so getting out of longs is becoming a very difficult proposition. The bias certainly seems to be continue being "lower". AVGO's earnings beat today (like every other tech beat) led to a 6% HIT to the stock ($10 off during after hours trading at the time of this writing...no telling what happens tomorrow). Mega caps/growth is certainly taking it on the chin, that's for sure.....but the problem is that small caps aren't getting the 'rotational' love that they should either. It's just a steady selloff underway. NFP determines if there is a temporary bottom that can be put in place before the weekend or if we are selling off another x hundred in the /es.
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