The market has flattered this week, only to deceive. After beginning with two strong sessions, the momentum faded midweek as the data-dependent Federal Reserve kept traders on tenterhooks.
Come Friday, traders would get to read key economic data that could have a say on the central bank's upcoming rate decisions for the year.
What Happened: Historical data shows that the September non-farm payrolls data is more often weak rather than strong, Scott Minerd, Guggenheim Partners global chief investment officer said late Thursday. He shared a graphic on Twitter showing that between 1997 and 2022, 76% of the jobs data came in less than estimates in September.
September is the NFP Downside Surprise King, according to the graphic. If the Labor Department's jobs data comes in below the consensus expectation of 250,000, it could be seen as weak and the Fed pivot trade could go into overdrive, he said.
The September jobs data alone can't lead the Federal ReserveFederal Reserve to drop its guard, according to Benzinga s take. There are several key economic events and data that could influence policymakers between now and the Nov. 2 Federal Open Market Committee meeting.
The consumer price inflation report is due on October 13, followed by the advance third-quarter GDP data on October 27. A couple of central bank decisions are planned for the month's end, from Europe and Japan.
The market will digest third-quarter earnings and guidance from corporations. In the past few years, profit growth has been a big factor in the market. If the slackness seen in the second quarter continues into the next and reflects the forward outlook, investors could construe it as more pain ahead for the market.
Calling for a policy pivot with Friday's data may not be accurate, although weak jobs data will encourage traders to go positive in the near term, at least in the near term.
The SPDR S&P 500 ETF TrustSPY closed Thursday at $373.20, down 1.03%, according to Benzinga Pro data.