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JP Morgan remain - "Tactically Bullish Ahead of a Good News is Bad News NFP"
Today's payrolls will trade strictly as a "good news is bad news" event.
JPM's trading desk expects a hot print above 150k to spark a hawkish yield spike, sending the SPX lower by as much as 1.75 percent.
Michael Feroli projects a soft 75k payrolls print and a 4.3 percent unemployment rate. Tyler notes that equities will respond positively to this moderate miss as policy expectations shift dovish and the 2Y yield eases.
NFP SCENARIO MATRIX
β’ 10 percent probability of >150k jobs: SPX loses 50bps to 1.75 percent as yields spike.
β’ 30 percent probability of 60k to 100k jobs (JPM base case): SPX loses 25bps to gains 50bps.
β’ 25 percent probability of 20k to 60k jobs: SPX gains 25bps to 75bps.
β’ Options expiring August 7 are currently pricing a 0.7 percent implied SPX move.
TACTICAL POSITIONING
Tyler remains tactically bullish on the underlying macro resilience driven by consumer spending and AI capex. Blended Mag7 EPS growth now exceeds 47 percent YoY, prompting the desk to recommend three specific expressions.
β’ TECH: Go tactical long Mag7 to play a near-term rebound alongside global semiconductors, specifically Korean AI reversion plays.
β’ CYCLICALS: Reduce Financials in favour of Industrials to capture global economic improvement and AI risk expansion.
β’ UNCORRELATED: Add exposure via Healthcare and EM ex AI, specifically targeting Latam regional equities.
Source: J.P. Morgan | Finvaulta... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
The range of possible outcomes shows why a steady approach helps keep decisions simple when markets react quickly.... Show More
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Sun Sep 13 2026 00:00:02 GMT+0000 (Coordinated Universal Time)
