The economic report to watch this week may disappoint Wall Street.
According to MKM Partners' Michael Darda, the January jobs report out Friday will likely show the labor market needs more time to recover from coronavirus case spikes and closures.
"We have a slight chance of a beat, but it's uncertain," the firm's chief economist and market strategist told CNBC's "Trading Nation" on Wednesday.
FactSet estimates the U.S. added 100,000 in non-farm payrolls last month versus a 140,000 decline in December. The unemployment rate is expected to hold steady at 6.7%.
If the numbers fall short, Darda urges investors to have patience. He sees employment figures meaningfully improving by spring and summer.
"If we get the reopening going, I think this V-shaped recovery that we saw in most of last year will come back," he said. "We're pretty optimistic. I think the economy is basically going to be back to its pre-Covid trend growth path by late 2021 moving into 2022."
Despite his optimism, Darda believes the solid growth won't translate into a big market year.
"We're thinking single digit gains probably for the S&P 500," he added. "The market has just simply discounted it."
Plus, he predicts interest rates will continue to rise as the V-shaped recovery reasserts itself.
"That's going to be a headwind for valuations," Darda said. "So, I wouldn't have really high expectations for the market this year. The fundamentals of the economy are going to improve for sure. But a lot of that has been discounted."