Non-farm payroll and ADP numbers are crucial indicators for understanding the health of the U.S. economy and the labor market, the figures released were negative during the week, so it’s worth noting that a significant and consistent decrease in these numbers is considered a very important and delicate pattern since it can signal major shifts.
A downturn in these figures indicates that companies are hiring fewer people or, in some cases, laying them off. This suggests a slowdown in economic activity. When fewer people are employed, consumer spending—a primary driver of economic growth—tends to decline, creating a self-reinforcing negative cycle.
This can put the economy on a path toward recession. When people are concerned about job security, they become more cautious with their spending and saving. A downturn in non-farm payrolls a critical leading indicator of future economic weakness.
A weakening labor market can give the Fed justification to lower interest rates. The "bad news is good news" pattern is a common market reaction to this. For that reason, when the poor jobs reports were released on Thursday and Friday (and even the JOLTS on Wednesday), the market rallied on the expectation that the Fed will cut rates to stimulate the economy. Be aware that the "risk-off" sentiment comes when investors fear a recession, in the past it happened days or weeks after the rate cuts.
It’s worth noting that after the bullish reaction on Friday, there was a bearish reversal in price action, I alerted in the chat and in my open feeds about this reversal candle around 8AM EST on Friday, the bearish follow through was not surprising and a MACD cross would signal more bearish continuation.
Futures are the main instrument for many traders, for that reason my weekly and monthly support and resistance levels include the ES=F $E-mini S&P 500 - main 2509(ESmain)$ , and NQ=F $E-mini Nasdaq 100 - main 2509(NQmain)$ . Get access to the ones for next week.
During the week, specific giants came to the rescue, especially $Alphabet(GOOG)$ $Alphabet(GOOGL)$ $Apple(AAPL)$ on Wednesday, followed by $Broadcom(AVGO)$ $Oracle(ORCL)$ $Tesla Motors(TSLA)$ on Friday. I've been bullish on GOOG and AAPL for the past weeks, and just last Wednesday, I highlighted how solid AVGO was in my fundamental publication. My bullish target for AVGO was reached, driven by its strong earnings report.
The question now is: what happens next week when these giants consolidate their moves? GOOG won't jump 9% in a day next week, nor will AVGO. Instead, they will likely return to their Bollinger range. Given Friday's bearish reversal in the $S&P 500(.SPX)$ after the spike from the weak jobs report, it's wise to consider the potential risks that must be managed.
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- AdnanW·2025-09-08momkkLikeReport