The Most Important Data for Stock Market: U.S. Jobs Reports vs. Inflation Readings
In a recent analysis by BofA Global Research, it has been revealed that futures contracts for the S&P 500 index are now more sensitive to U.S. jobs reports than inflation readings. According to BofA analysts, the nonfarm payrolls report has once again taken the spotlight as the most crucial data release for stocks. All eyes are now on the upcoming August payrolls report, set to be released by the Bureau of Labor Statistics this week.
As inflation has significantly eased from its peak in 2022, investors are now shifting their focus to the labor market for signs of potential softening. The BofA research indicates that S&P 500 futures are reacting more to the consumer-price index than at any other point post-Covid, making the payrolls report the primary source of volatility in the market.
The chart provided by BofA illustrates the reaction of the eMini S&P 500 Future Continuous Contract since August 2019 in the minutes leading up to and following the release of nonfarm payrolls and consumer-price index data. This data is based on six-month averages, highlighting the significance of these reports on market movements.
In conclusion, investors should pay close attention to upcoming U.S. jobs reports as they have a significant impact on the stock market. Keeping an eye on employment data can provide valuable insights into market trends and potential opportunities for investment. Stay informed and stay ahead in the ever-changing world of finance.