This week the market only flattered to deceive. After starting with two strong sessions, momentum faded mid-week as data dependent federal reserve kept the dealers in suspense.
Next Friday, traders could digest key economic data that could have a say in upcoming central bank interest rate decisions for the year.
What happened: Historical data suggests that the September non-farm payroll data is weak rather than strong Scott Minerd, Guggenheim Partners‘ the global chief investment officer said late Thursday. He shared a chart on Twitter showing that between 1997 and 2022, employment data came in below estimates about 76% of the time in September.
The graphic was titled “September is NFP Downside Surprise King”.
If the work department‘s jobs data is below consensus expectation of 250k, may be considered weak and “Fed pivot trading may ramp up,” he added.
In the past 25 years, September has failed to beat the NFP consensus 76% of the time, the worst surprise record of any month. If we break below the consensus of 250k (could possibly be negative), the fed pivot trade could go into overdrive. https://t.co/diu3seu0O2 pic.twitter.com/zCOccWxvZS
— Scott Minerd (@ScottMinerd) October 6, 2022
See also: Sharp drop in US job vacancies, will the Fed change direction now? Don’t bet on it
Gasoline Gas Take: September’s payroll data alone cannot persuade the Federal Reserve to lower its guard. Leading up to the Federal Open Market Committee meeting on November 2 are several key economic events and data that could impact policymakers.
The September CPI report is due on October 13th, followed by the third quarter GDP advance on October 27th. Some central bank decisions from Europe and Japan are also scheduled for the end of the month.
Additionally, the market will digest third quarter earnings and forecasts for companies. Corporate earnings growth has been a key driver for the market…
