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We have a busy Friday, with a number of indicators coming out. We're going to take a look at historical market reactions to see how stocks typically respond to different data. Friday's economic announcements with a published market consensus on Briefing.com include the following:

  • 8:30 AM Non-farm Payrolls- market expects 150K
  • 8:30 AM Non-farm Private Payrolls- market expects 165K
  • 8:30 AM Unemployment Rate- market expects 7.7%
  • 10:00 AM Factory Orders- market expects 0.5%
  • 10:00 AM ISM Services- market expects 53.5

In order to do this, we have compiled data on over 6,000 U.S. economic releases and market expectations over the last 8 years to help us pick which stocks are most likely to outperform or underperform the day of a market beat or miss. To drown out the noise from specific stocks doing well for non-macro reasons, we are going to look only at sector SPDRs. All data is compiled by the author from Yahoo Finance.

Non-farm Payrolls

Historical Observations:

Observations: 95

Beats: 39

Meets: 3

Misses: 53 (misses 55.0 % of the time)

When there is a surprise and Non-farm Payrolls is larger than expected, historically the best performing sector fund is the Industrial Sector SPDR (NYSEARCA:XLI), which has an up day 68.4% of the time and increases on average by 0.5% on the day of the surprise. This group includes stocks like GE (NYSE:GE), United Technologies (NYSE:UTX) and Caterpillar (CAT).

The worst performing sector is the Utilities Sector SPDR (NYSEARCA:XLU), which averages a daily return of 0.0%. This group includes Duke Energy Corp. (NYSE:DUK), Southern Co. (NYSE:SO) and Dominion Resources (NYSE:D).

When there is a surprise and Non-farm Payrolls is lower than expected, historically the best performing sector fund is the Utilities Sector SPDR, which has an up day 41.2% of the time and increases on average by -0.1% on the day of the surprise.

The worst performing sector is the Consumer Discretionary SPDR (NYSEARCA:XLY), which averages a daily return of -0.5%. This group includes Comcast (NASDAQ:CMCSA), Home Depot (NYSE:HD) and Amazon (NASDAQ:AMZN).

Non-farm Private Payrolls

Historical Observations:

Observations: 28

Beats: 12

Meets: 1

Misses: 15 (misses 53.0 % of the time)

When there is a surprise and Non-farm Private Payrolls is larger than expected, historically the best performing sector fund is the Consumer Discretionary SPDR, which has an up day 66.7% of the time and increases on average by 0.5% on the day of the surprise.

The worst performing sector is the Energy Select Sector SPDR (NYSEARCA:XLE), which averages a daily return of 0.1%. This group includes Exxon (NYSE:XOM), Chevron (NYSE:CVX) and Schlumberger (NYSE:SLB).

When there is a surprise and Non-farm Private Payrolls is lower than expected, historically the best performing sector fund is the Utilities Sector SPDR, which has an up day 35.7% of the time and increases on average by -0.2% on the day of the surprise.

The worst performing sector is the Financial Select Sector SPDR (NYSEARCA:XLF), which averages a daily return of -1.0%. This group includes Wells Fargo (NYSE:WFC), JP Morgan (NYSE:JPM) and Bank of America (NYSE:BAC).

Unemployment Rate

Historical Observations:

Observations: 94

Beats: 7

Meets: 81

Misses: 6 (misses 6.0 % of the time)

When there is a surprise and Unemployment Rate is larger than expected, historically the best performing sector fund is the Technology Sector SPDR (NYSEARCA:XLK), which has an up day 42.9% of the time and increases on average by 0.2% on the day of the surprise. This group includes stocks like Apple Inc. (NASDAQ:AAPL), IBM (NYSE:IBM) and Microsoft (NASDAQ:MSFT).

The worst performing sector is the Consumer Discretionary SPDR, which averages a daily return of -0.2%.

When there is a surprise and the Unemployment Rate is lower than expected, historically the best performing sector fund is the Financial Select Sector SPDR, which has an up day 60.0% of the time and increases on average by 1.1% on the day of the surprise.

The worst performing sector is the Utilities Sector SPDR, which averages a daily return of -0.1%.

Factory Orders

Historical Observations:

Observations: 93

Beats: 26

Meets: 47

Misses: 20 (misses 21.0 % of the time)

When there is a surprise and Factory Orders is larger than expected, historically the best performing sector fund is Consumer Staples Sector SPDR (NYSEARCA:XLP), which has an up day 61.5% of the time and increases on average by 0.0% on the day of the surprise. This group includes stocks like Procter & Gamble (NYSE:PG), Coca-Cola (NYSE:KO) and Philip Morris (NYSE:PM).

The worst performing sector is Energy Select Sector SPDR, which averages a daily return of -0.7%.

When there is a surprise and Factory Orders is lower than expected, historically the best performing sector fund is Consumer Discretionary SPDR, which has an up day 55.0% of the time and increases on average by 0.1% on the day of the surprise.

The worst performing sector is Industrial Sector SPDR, which averages a daily return of -0.4%.

ISM Services

Historical Observations:

Observations: 92

Beats: 44

Meets: 16

Misses: 32 (misses 34.0 % of the time)

When there is a surprise and ISM Services is larger than expected, historically the best performing sector fund is the Energy Select Sector SPDR, which has an up day 68.2% of the time and increases on average by 0.5% on the day of the surprise.

The worst performing sector is the Utilities Sector SPDR, which averages a daily return of 0.0%.

When there is a surprise and ISM Services is lower than expected, historically the best performing sector fund is the Technology Sector SPDR, which has an up day 53.1% of the time and increases on average by 0.1% on the day of the surprise.

The worst performing sector is the Energy Select Sector SPDR, which averages a daily return of -0.5%.

Good luck traders: if you have suggestions for other stats on the market you'd like to see, please message us.

Note: while we believe all of the above information is correct, we cannot be held responsible or liable for the content or accuracy of any posted (or any other form of transmitted) material in any way, or for any consequences resulting from its use. All data is provided for informational purposes only, and we shall not be held liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Source: How To Trade Unemployment And ISM Numbers On Friday