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Kensho Stats

Blowout jobs report should boost these 5 stocks

An employee assembles front-end brakes to a bicycle frame at Worksman Cycles in Queens, New York.
Andrew Harrer | Bloomberg | Getty Images
An employee assembles front-end brakes to a bicycle frame at Worksman Cycles in Queens, New York.

The jobs report Friday handily beat expectations, setting up a winning trade in certain cyclical stocks, if history is any guide.

The U.S. economy created 255,000 jobs in July versus the Wall Street consensus of 180,000. Using hedge fund analytics tool Kensho, CNBC Pro screened for which securities did well over the past decade on the day when the nonfarm payrolls figure beat estimates.



When the number comes in above forecasts, it's typically seen as a positive for the economy by market players. More jobs generally translate into better economic growth, greater spending power and more ranks of the insured.

So industrials, materials, consumer staples, consumer discretionary and health care were among the best-performing sectors on the day. Financials were also a good bet recently, as the markets may see an improving jobs market allowing the Federal Reserve to feel more comfortable raising interest rates — which is good for banks.

The leading individual stocks follow a similar pattern. GM, Bank of New York Mellon and staffing firm Robert Half are among the top S&P performers.

If the report had missed expectations, safe havens likely would be the winning trade. When fewer jobs are being created than the market expects, concerns may arise about economic growth. The major benchmarks tended to fall while precious metals outperformed. Select gold ETFs, like the SPDR Gold ETF (GLD) and the iShares Gold Trust (IAU) were good bets along with gold miners Yamana and Goldcorp.

Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.