October 4, 2024 – Michael Hartnett, a strategist at Bank of America, has indicated that the upcoming U.S. non-farm payrolls report, set to be released on Friday, could play a crucial role in the performance of risk assets. If the report falls within the expected range, there may be a potential rebound in these assets.
Hartnett pointed out that if the data reveals an increase of between 125,000 and 175,000 jobs for the previous month, it would bolster discussions around a soft landing for the economy, keeping bond yields stable and potentially triggering a wave of risk-on trades. He emphasized that bullish sentiment is currently strong, noting “conclusive signs” that China’s stimulus measures are beginning to take effect and that the Federal Reserve is likely to adopt a more accommodative policy stance.
However, Hartnett also provided critical thresholds for the non-farm payroll data. Should the employment figures exceed 225,000 and the unemployment rate dip below 4.1%, it could lead to the U.S. 30-year Treasury yield rising above 4.5%. Conversely, if the payroll numbers fall below 75,000 and the unemployment rate exceeds 4.3%, it may signal a looming recession.
Investors will be closely monitoring the release of the non-farm payrolls report, as it could significantly influence market sentiment and asset performance in the days to come.
