Nonfarm Payroll Beat

Key points

• A massive nonfarm payroll beat (>87k).
• Over the subsequent 1-to-5-day window, the Nasdaq typically stages a highly volatile relief rally, while broad commodities (GSG) significantly underperform.
• Extending out to the 1-to-4-week horizon, initial equity momentum fades into chop, whereas safe-haven assets like gold catch a definitive structural bid.

Nonfarm Payroll Beat > 87k

The Bureau of Labor Statistics (BLS) dropped the May employment report last Friday, revealing that the economy added 172k jobs. With the median economist estimate sitting at 85k, the print came in a staggering 87k above consensus.

To find an informational edge, let's look at how equities, bonds, and commodities historically digest a payroll beat of 87k or greater.

Please note the following:

If the market is closed on the release date (e.g., Good Friday), we roll the performance data to the next active trading day.

Source: BLS and Bloomberg

Release Day Results

As the table below illustrates, when nonfarm payrolls beat expectations by more than 87k, value stocks (IWN) perform the best. The Dow Jones Industrial Average also boasts a surprisingly high win rate. Conversely, the 10-Year Treasury gets taken to the woodshed, struggling with a dismal 22% win rate. The last ti