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Jobs miss is the 'worst case scenario' for market

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

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The September jobs report came in 60,000 payrolls short of Wall Street estimates, raising concern that the Federal Reserve may have to keep interest rates at zero for the forseeable future because the economy is faltering, something Fed chief Janet Yellen and crew have made clear they don't want to do.

At the start of the summer, investors were preparing for a rate increase by the Fed, taking comfort that rising borrowing costs would be more than offset by a strengtheningeconomy.

"This is the worst possible scenario for U.S. stocks," said Dan Nathan, options trader and co-founder of RiskReversal.com. "You will have dovish monetary policy from here on out that will lack teeth and continued uncertainty about how and when the Fed lifts off, which will keep things volatile."

And how do you trade this situation, which sent stock prices and bond yields lower on Friday?

Nathan suggests buying the Utilities Select Sector SPDR fund, one of the few sectors higher Friday, which should benefit from investors seeking yield higher than what fixed income can give them. Utilities' steady income in the face of a slowing economy shouldn't hurt either.

"The Fed is backed into a corner," said Steve Grasso, director of institutional sales at Stuart Frankel & Co. on the floor of the New York Stock Exchange. "They simply can't raise rates as higher rates will kill multinationals and kill the market further."

Read MoreHighly successful indicator predicts 18% rally

In order to identify some more trades, CNBC Pro searched for stocks that outperformed under a scenario of weak employment and falling rates.

Using Kensho, a quantitative markets tool, CNBC Pro searched for which stocks rose one month after a jobs report miss and a significant drop in government bond yields.

There have been 22 such occasions in the last decade. Here are the stocks that trade positively and their average returns during that month.

No surprise here. The companies whose shares do best have steady cash flows in the face of a slowing economy and a healthy dividend yield to attract investors. Sectors such as utilities, REITS and consumer staples are where these types of companies typically reside.

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