Why the jobs report could topple stocks

The March data could drag on markets and delay Fed cuts

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Good morning!

Phil here, writing to you from Manhattan — it’s jobs day.

Stocks are ticking higher in pre-market trading after selling off Thursday, though a key data dump could drag equities lower.

Today, we’re previewing the labor market report. Then, we'll cover how a Fed official spooked markets, Trump’s stock trouble, and why oil prices are skyrocketing.

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At a glance*:

  • DJIA: 38,982.00, up 0.17%

  • S&P 500: 5,211.75, up 0.28%

  • Nasdaq Composite: 18,135.00, up 0.32%

  • 10-year Treasury yield: 4.333%, up 2 basis points

  • Gold: $2,313.80 per ounce, up 0.23%

  • Bitcoin: $67,035.79, down 2.46%

  • Brent crude: $91.02 a barrel, up 0.41%

*Pre-market data and moves as of 6:55 a.m. EST Friday

Be careful taking jobs data at face value

The March nonfarm payrolls report is due at 8:30 a.m. in New York.

Dow Jones estimates put job growth at 200,000 for March, while Goldman Sachs strategists have a higher prediction at 240,000, on account of above-normal immigration trends.

Those estimate are squarely below February’s initial reading of 275,000.

Recent history cautions against taking the numbers at face value. Previous jobs data that looked strong at first were revised lower after the fact:

  • December’s report was revised lower by 43,000 to 290,000

  • January’s report was revised lower by 124,000 to 229,000

Your guess is as good as mine as far as how reliable today’s numbers will be.

Some data, like real wage growth and nominal wage growth, do seem to support to a soft-landing scenario. Yet it is also true that the rise of remote work, side hustles, and AI are changing the job landscape in a way the data fail to capture.

“We don’t want to attach too much importance to one month’s snapshot, but there’s been nothing to indicate any slowdown,” Mark Hamrick, a senior analyst at Bankrate, told me on a call.

The historic streak of low unemployment gives today’s data release further intrigue.

The unemployment rate has hovered below 4% for two years. That run could extend to 25 months today for the first time since the 1960s.

Gene Goldman, the chief investment officer for Cetera Investment Management, told me he’s seen few signs of any cooling in labor market.

Should the labor market indeed show more strength today, that could mean a “good news is bad news” scenario for investors, according to Goldman (the investment chief, not the bank).

“If the number comes in higher than expected, there’s less of a chance the Fed cuts rates, which means there’s less of a chance that the Fed meets the markets’ expectations of rate cuts,” he said. “The market could sell off.”

To Hamrick, stocks seem due for a pullback no matter what the Friday data shows.

The S&P 500 has climbed about 26% since its October low.

“Some cooling in the stock market’s movement is probably warranted,” Hamrick said. “We’ve come a long way in what feels like a short amount of time.”


  • Neel Kashkari, the President of the Federal Reserve Bank of Minneapolis, said that cutting interest rates may not be needed at all this year. More Fed comments are scheduled for Friday. (Bloomberg)

  • Gold is outperforming the S&P 500 this year. Not only because traders expect rate cuts, but because they’re trying to front-run central bank purchases. (DataTrek Research)

  • Trump’s stock has dipped from a frothy debut. Shares of Trump Media & Technology touched a new closing low — but short sellers pay a premium to bet against it. (Barron’s)

  • Oil prices have surged to start the year. Turmoil in the Middle East, the ongoing war between Russia and Ukraine, and OPEC’s crude production cuts have pushed Brent to $90 a barrel. (WSJ)

Rapid-fire headlines:

  • Weekly jobless claims hit the highest in two months (Reuters)

  • The US trade gap widened in February to largest in nearly a year (Bloomberg)

  • Levi Strauss stock traded as much as 20% higher after crushing earnings (Business Insider)

  • The number of homes for sale is 37% below pre-pandemic levels (ResiClub)

  • Google may start charging users for AI-powered search features (FT)

Last thing:

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