According to BlockBeats, a simulation by JPMorgan's trading department suggests that if the upcoming employment data mirrors the recent weak ADP report, the U.S. stock market may experience significant sell-offs. JPMorgan outlined potential market reactions under various scenarios:
If job additions range between 85,000 and 105,000, the S&P 500 Index might decline by 0.25% to 1.5%. Should the figure fall below 85,000, the index could plummet by 2% to 3%.
The report warns that in the worst-case scenario, the market could face stagflation risks, characterized by sluggish economic growth coupled with high inflation, leaving fiscal and monetary policies ineffective. It emphasizes that as long as non-farm payrolls exceed 100,000, the stock market will likely remain supported. However, employment data has previously exceeded expectations and could do so again.
JPMorgan forecasts that if job additions are between 125,000 and 145,000, the S&P 500 Index might rise by 0.75% to 1.25%. If the number surpasses 145,000, the index's gains could expand to 1% to 1.5%.