JPMorgan Feroli's NFP Scenarios for SPX - FJElite

This print takes on less importance given the uncertainty surrounding the Middle East Conflict and this is reflected in a lower than usual volatility and thus scenario outcomes. A weaker print will bring back stagflationary fears, which is risk-negative. A hotter print will see Equities reacting to bond yields, where inflation concerns could drive yields higher along with bond vol, which would be equity negative. It is also possible that we get a hotter print without a material change to the unemployment rate, in which case stocks would react positively to the favorable growth outlook. Zooming out, we remain of the view that the economy is good and getting better and that if the Middle East Conflict were to end today, the consumer tailwind would aid stocks in taking another step higher.