The Non-Farm Payrolls (NFP) report is one of the most highly anticipated economic data releases in the US, and its impact on the stock market can be significant. To help investors prepare for the upcoming NFP report on May 8, JPM US Market Intelligence has created a scenario matrix that outlines potential market movements based on different NFP outcome scenarios.

According to the matrix, there are five possible scenarios for the NFP report:

1. Above 125k: If the NFP report shows an increase of more than 125,000 jobs, the S&P 500 (SPX) is likely to lose 1% to gain 1%. This would indicate a strong labor market and could lead to increased buying pressure on stocks.
2. Between 85k – 125k: If the NFP report shows an increase of between 85,000 and 125,000 jobs, the SPX is likely to be flat to up 75 basis points (bps). This scenario suggests a moderate labor market growth, which could result in a neutral or slightly bullish market reaction.
3. Between 45k – 85k: If the NFP report shows an increase of between 45,000 and 85,000 jobs, the SPX is likely to lose 50 bps to gain 50 bps. This scenario indicates a slower labor market growth, which could lead to a cautious market reaction.
4. Between 5k – 45k: If the NFP report shows an increase of between 5,000 and 45,000 jobs, the SPX is likely to lose 50 bps to gain 25 bps. This scenario suggests a weak labor market growth, which could result in a negative or neutral market reaction.
5. Below 5k: If the NFP report shows an increase of less than 5,000 jobs, the SPX is likely to be down 50 bps to 1%. This scenario indicates a poor labor market growth, which could lead to a significant sell-off in the stock market.

It’s important to note that these scenarios are based on historical data and past trends, but there is no guarantee that the same patterns will repeat themselves in the future. Market conditions and other economic factors can also influence the market’s reaction to NFP data.