BofA: BAD News Becomes BAD News for Stocks
Over the past 2 months, the S&P 500 and USD have shown a negative 78% correlation, suggesting bad economic data has often benefited stocks.
However, BofA warns this could change if growth weakens further.
BofA: “We believe the goldilocks range for NFP is +125-175K, which would maintain the unemployment rate largely unchanged assuming labor supply growth remains at or above today’s level.”
'Sub-125K gains in NFP could trigger the Sahm Rule, reviving recession fears in the market.'
However, BofA believes stronger growth, as long as inflation remains in check, would also be positive for stocks
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