The latest jobs report shocker may have missed a troubling trend.
Crossmark Global Investments' Victoria Fernandez warns it didn't capture the fallout from surging coronavirus cases.
"The data was collected through the middle of June," the firm's chief market strategist told CNBC's "Trading Nation" late last week. "It was really the second half of June when we saw states like where I am here in Texas start to reverse their opening up plans. That did not get captured in this number completely."
Fernandez, who oversees $4.8 billion in assets, believes it's a major reason for investors to curb expectations.
"People have to be prepared that we could see something that's maybe a downside surprise when it comes to the July number," she said, adding the weakness will start showing up in the weekly numbers.
June's employment numbers, which revealed the biggest single-month payroll gain in the nation's history, marked the second month in a row that sharply exceeded expectations.
The latest report showed payrolls jumped by 4.8 million. The Dow Jones survey of economists had expected a 2.9 million gain. Plus, the unemployment rate dropped to 11.1% from 13.3%.
But with several states rolling back reopenings, Fernandez is on alert.
"We look at jobs that are coming back, and yes, we had great gains in leisure and hospitality, in retail, in health — all of those were really strong numbers," she said. "But those are all the same jobs that are going to be affected in states like California, Texas, Arizona [and] Florida as they all turn around their plans."
"If you look at the four states I mentioned earlier that are actually slowing down their opening plans, they're about 30% of the U.S. GDP and some of the states that are opening up in the northeast are about half of that," said Fernandez. "So, we're going to have to see a lot more positive numbers in new states that are opening up to counteract the decline that we're seeing elsewhere."
Due to the uncertainty, she's urging caution and telling investors to avoid making big bets in the stock market right now.
"You can be opportunistic in some of your holdings, but you have be careful," Fernandez said. "That consumption and that demand is really key."