The Non-Farm Payrolls (NFP) report is one of the most highly anticipated economic data releases every month, and this Friday’s report is no exception. To help investors prepare for the upcoming data, JPM US Market Intelligence has created a scenario matrix that outlines the potential movements of the S&P 500 Index (SPX) based on different NFP outcome scenarios. In this blog post, we will provide an in-depth analysis of each scenario and what they could mean for the market on September 5th.

Scenario 1: Above 110k
According to the JPM matrix, if the NFP report shows a gain of more than 110,000 jobs, the SPX is likely to gain around 1% to 1.5%. This would be a strong sign of a healthy labor market and could lead to further gains in the stock market. However, it’s worth noting that this scenario is only a 5% probability, so investors should exercise caution when making investment decisions based solely on this outcome.

Scenario 2: Between 85k – 110k
If the NFP report shows a gain between 85,000 and 110,000 jobs, the SPX is likely to gain around 50 basis points to 1.25%. This would be a moderate sign of job growth and could lead to continued stability in the stock market. The probability of this scenario occurring is 25%.

Scenario 3: Between 65k – 85k
If the NFP report shows a gain between 65,000 and 85,000 jobs, the SPX is likely to gain around 50 basis points to 100 basis points. This would be a sign of steady job growth and could lead to further gains in the stock market. The probability of this scenario occurring is 40%.

Scenario 4: Between 40k – 65k
If the NFP report shows a gain between 40,000 and 65,000 jobs, the SPX is likely to gain around 25 basis points to 50 basis points. This would be a sign of slowing job growth, but still positive overall. The probability of this scenario occurring is 25%.

Scenario 5: Below 40k
If the NFP report shows a gain of less than 40,000 jobs, the SPX is likely to lose around 25 basis points to 75 basis points. This would be a negative sign for the labor market and could lead to losses in the stock market. The probability of this scenario occurring is only 5%.

The NFP scenario matrix provides valuable insights into the potential movements of the SPX based on different outcome scenarios. While each scenario has a different probability of occurring, investors should be aware of the potential implications and make informed investment decisions accordingly. As always, it’s important to diversify your portfolio and consult with a financial advisor before making any investment decisions.