Daily Brief - NFP is Here!

TLDR: The March Non-Farm Payroll (NFP) report highlighted an exceptional phase in the labor market's ongoing strength.

Job creation significantly exceeded forecasts, indicating a robust and resilient labor market. The addition of 303,000 jobs far surpassed the anticipated 200,000, showcasing an economy in acceleration. This performance follows a revised gain in February.

Significant job growth was noted in sectors such as health care, government, and construction.

Average hourly earnings for all employees on private nonfarm payrolls went up by 12 cents to $34.69, marking a 4.1% increase over the past year.

The consistent unemployment rate and wage growth are in line with expectations, showcasing the economy's stability. This situation, however, introduces uncertainties regarding the timing of potential rate cuts by the Federal Reserve.

Scenario Spotlight: Impact of a jump in yields on the SPX

In the previous 8 episodes where the 10Y rose 8bps in 1 day and yields crossed 4.4%, the S&P 500 historically was at risk of seeing downside in the near term.

Market Movers:

Here are the historically best and worst performing US sectors when yields jump:

The top 3 performing assets on a 1-month horizon:

1. S&P Homebuilders Select Industry Index with a return of 3.05%
2. S&P Technology with a return of 2.50%
3. Russell 2000 Growth with a return of 2.27%

The bottom 3 performing assets on a 1-month horizon:

1. Energy Select Sector with a return of -3.64%
2. MSCI US REIT Index with a return of -3.27%
3. S&P OIL GAS EXPLOR PROD with a return of -2.73%

Asset Spotlight: EOG at a recent high

In the past 6 similar occasions where EOG Resources stock was at a recent high, Toggle's analysis reveals the stock tends to see a median downward movement in the following 3 months.