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Trends & Analysis
News

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News

Crude oil reverses trend on US data

News

Is Apple’s bull run just getting started?

News

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EUR/USD plunges after parliament elections

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Is a big move coming for AMD?

Asset Watch

How should you trade Friday’s U.S. nonfarm payrolls?

Thursday June 6, 2024

Is the U.S. economy slowing? Is inflation moderating? Will the Fed cut interest rates? These questions usually get answered when U.S. nonfarm payrolls hit the wire. And with the next print scheduled for Jun. 7, the short-term fate of the S&P 500 could be at stake.
Bank of America noted on Jun. 3 that the “Goldilocks range for equities” is 125,000 to 175,000 net new jobs added. In other words, a print in that range would support the narrative that the U.S. economy has cooled enough for rate cuts but is far from an alarming slowdown.
“Bad news has been good news for equities over the past two months,” BofA continued. “But, if growth deteriorates too much, bad news can turn into bad news.”
Friday’s payrolls release is poised to fuel or fuddle the recent bull run, so a couple of key technical levels should be on your radar.

After a breakout in early May, the S&P 500 didn’t close below its five-day moving average for roughly three weeks. And as the index closes above the key level on Jun. 3 and 4 (following intraday breakdowns), a long position is justified if the S&P 500 holds the line.
If not, and payrolls and wage inflation outperformances sour the mood, the 50-day MA could be a source of support. It acted as resistance in late April (after a breakdown) and buyers stepped in near the level on May 31. As a result, it could be a solid entry point for those who prefer to wait until after the release to open a position.
So, could a payrolls party induce another three weeks of S&P 500 bliss, or is a breakdown more likely?


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