Under the most likely scenario, JPMorgan traders expect the stock market to carve out a small gain after Friday’s jobs report. The December nonfarm payroll report will shed light on last month’s unemployment rate, the size of any gain in the labor market and workers’ wage gains. Depending on how the data comes in, it could also affect the Federal Reserve’s next interest rate decision at its meeting later this month. Economists polled by Dow Jones expect jobs to have grown by 54,000 last month, a touch below the 64,000 in November. The consensus also predicts the unemployment rate will drop slightly, to 4.5% in December from 4.6%. In a Wednesday note to clients, the JPMorgan trading desk outlined several scenarios for Friday’s jobs report and analyzed how each might move stocks. JPMorgan chief U.S. economist Michael Feroli expects the economy added 75,000 jobs last month, and the unemployment rate was unchanged at 4.6%. Some of the bank’s optimism toward the monthly job gain stems from the National Federation of Independent Business Small Business Survey’s Hiring Sub-index, which JPMorgan says has typically served as a leading indicator for nonfarm payrolls. “That sub-index has been trending higher since this summer. This may not be reflected in this week’s print, but we look for the trend to point toward accelerated hiring,” JPMorgan wrote. “It remains to be seen if this resumption in hiring will add an inflationary impulse.” The bank’s scenarios for Friday’s jobs report is listed below, alongside the probability of each happening: More than 105,000 jobs added, 5% chance: The S & P 500 could lose 0.5% to 1%. Between 75,000 jobs and 100,000 jobs, 25%: The S & P 500 could gain 0.25% to 1%. Between 35,000 jobs and 75,000 jobs, 40%: The S & P could gain 0.25% to 0.75%. Between 0 jobs and 35,000 jobs, 25%: The S & P 500 could fluctuate anywhere between losing 0.25% and gaining 0.5%. No jobs are added, 5%: The S & P 500 could lose between 0.5% and 1.25%.
