Investors will no doubt be using today's employment report as a guide to future Fed moves. The consensus is looking for a gain of 200K jobs.
We looked at employment reports going back to January 2004 to see how the sectors react on report days. When job numbers miss expectations, rate sensitive sectors such as utilities and financials are the only ones that, on average, have been up on the day, while technology and industrials take the biggest hits. When job numbers beat, just the opposite occurs. Investors, assuming more tightening is to come, sell the financials and utilities and buy technology and industrials.
On another note, the homebuilder group, which is probably the most rate sensitive, goes up an average of 130 bps on days when job numbers miss and falls an average of 79 bps when the numbers beat. See table below:
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