September Employment Report Preview

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Includes: DDM, DIA, DOG, DXD, EEH, EPS, EQL, FEX, FWDD, HUSV, IVV, IWL, IWM, JHML, JKD, OTPIX, PSQ, QID, QLD, QQEW, QQQ, QQQE, QQXT, RSP, RWM, RYARX, RYRSX, SCHX, SDOW, SDS, SFLA, SH, SMLL, SPDN, SPLX, SPSM, SPUU, SPXE, SPXL, SPXN, SPXS, SPXT, SPXU, SPXV, SPY, SQQQ, SRTY, SSO, SYE, TNA, TQQQ, TWM, TZA, UDOW, UDPIX, UPRO, URTY, UWM, VFINX, VNO, VOO, VTWO, VV, WRK
by: Bespoke Investment Group

Heading into Friday's Non Farm Payrolls (NFP) report for September, economists are expecting an increase in payrolls of 184K, which would be a modest decline from August's stronger-than-expected reading of 201K. In the private sector, economists are expecting an increase of 180K. The unemployment rate is expected to tick down to 3.8% from last month's reading of 3.9%. Average hourly earnings are expected to grow at a rate of 0.3% versus the 0.4% reading last month. Given the recent concerns over stronger-than-expected data, an average hourly earnings number as strong as last month would likely be problematic for the market. Finally, average weekly hours are expected to be unchanged at 34.5.

Ahead of the report, we just published our eleven-page preview of the September jobs report. This report contains a ton of analysis related to how the equity market has historically reacted to the monthly jobs report, as well as how secondary employment-related indicators we track looked in September. We also include a breakdown of how the initial reading for September typically comes in relative to expectations and how that ranks versus other months.

One topic we cover in each month's report is the S&P 500 stocks that do best and worst from the open to close on the day of the employment report based on whether or not the report comes in stronger or weaker than expected. In other words, which stocks should you buy, and which should you avoid? The table below highlights the best-performing stocks in the S&P 500 from the open to close on days when the Non-Farm Payrolls report has been better than expected over the last two years.

Of the top-performing stocks on days when NFP beats expectations, seven sectors are represented, but Consumer Discretionary leads the way with nine. Vornado (NYSE:VNO) has been the best performing stock with an average open to close gain of 2.42%, but it is followed by seven stocks in the Consumer Discretionary sector which have all gained 1%+ from the open to close. WestRock (NYSE:WRK) has been the most consistent stock to the upside with open-close gains 91% of the time.