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After Jobs Number How Will Market Move?

Thursday, 3 May 2012 | 2:58 PM ET

Once again the market seems to be on hold, ahead of the latest jobs number.

According to estimates, Friday's jobs report is expected to show hiring rebounded last month with 170,000 new jobs added, an improvement from 120,000 in March. Private payrolls are seen rising by 175,000.

Aren't those expectations built into the market already?

Not entirely. Fast Money trader Brian Kelly explains how the market will likely react if the jobs numbers are weak, in-line or better than expected and you might be surprised by what's coming.

Below 100,000

If the number is terribly weak, Kelly thinks the market surges. That may sound counterintuitive but, “Anything below 100,000 and I think the market says here comes more QE,” Kelly explains.

As Randall Kroszner, former Fed governor and now a professor at the university of Chicago said on Wednesday's Fast Money, with the current bond buying program ending in June, the Fed is watching this number carefully.

A very low number “will tell us whether we’re having another false dawn in the labor market," he says.

Ahead of Jobs Report & LinkedIn's Earnings
CNBC's Steve Liesman offers insight on unemployment data and which economic indicator best gauges the health of the U.S. economy. Ken Sena, Evercore Partners analyst, also shares his expectations for LinkedIn ahead of its earnings report this afternoon.

Between 100,000 and 150,000

If the number is slightly below expectations, Kelly says to look for confusion in the market – and that could trigger a sell-off as investors go into 'sell first and ask questions later' mode.

In this scenario, Kelly worries that the Street will panic. He doesn’t think signals from the Fed have been clear as to what the course of action may be if hiring slows, modestly.

Between 150,000 and 200,000

A number in this range is widely considered in-line with expectations. The most likely market response will be a tepid move – in either direction - as investors either breathe a sigh of relief or sell the news.

Above 200,000

“If we get 200,000 or higher, above expectations, then I think we’re off to the races,” says Kelly. That would suggest the recovery in the US has not stalled – a good thing for housing, banking and other trouble spots in the economy.

What do you think? We want to know!

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Trader disclosure: On May 3, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU; Stephanie Link is long JPM; Stephanie Link is long AAPL; Stephanie Link is long IBM; Stephanie Link is long FCX; Stephanie Link is long COST; Stephen Weiss is long MDRX; Stephen Weiss is long AIG; Stephen Weiss is short JCP

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The following companies are clients of SunTrust Robinson Humphrey, Inc. and the firm has received or is entitled to receive compensation for investment banking services involving their securities within the last 12 months: GMCR
The following companies are clients of SunTrust Robinson Humphrey, Inc. and the firm has received compensation for non-investment banking services within the last 12 months: GMCR An affiliate of SunTrust Robinson Humphrey, Inc. has received compensation for products or services other than investment banking services from the following companies within the last 12 months: GMCR

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