Tonight at 21:30, the United States will release the delayed November non-farm employment data affected by the government shutdown. Morgan Stanley strategist Michael Wilson analyzed before the non-farm report release, stating that if the employment data shows mild weakness, it could actually drive U.S. stocks up—because it would raise market expectations for further rate cuts by the Federal Reserve.
Wilson pointed out in a research report released on Monday that the current market has returned to the logic of "good economic news = bad stock market, bad economic news = good stock market." He explained that while strong performance in the labor market is beneficial for economic fundamentals, it would reduce the probability of rate cuts by the Federal Reserve next year. Last Wednesday, the Federal Reserve announced a rate cut of 25 basis points as expected, marking the third consecutive rate cut; following this rate cut, the MSCI global market index immediately set a new historical record.
Economists generally expect that the United States will add about 50,000 non-farm jobs in November, with the unemployment rate remaining at 4.5%. This data combination reflects that while the labor market shows signs of fatigue, there are no signs of a sharp deterioration yet. In addition to the non-farm data, the U.S. will also release multiple economic indicators such as inflation and retail sales this week, which will effectively fill the statistical gaps caused by the previous government shutdown and may have a significant impact on the Federal Reserve's expectations for the rate cut path.
Despite the dot plot released by the Federal Reserve last week showing that the decision-making body expects to implement only one rate cut of 25 basis points next year, most Wall Street investment banks still adhere to their previous judgment—believing that the Federal Reserve will cumulatively cut rates by 50 basis points next year (executed in two phases), with only differences in the specific timing. Among them, Morgan Stanley predicts that the Federal Reserve will cut rates in January and April next year; meanwhile, Citigroup's strategist team has provided a more optimistic market outlook in its latest forecast: led by Scott Chronert, analysts expect that by the end of 2026, the S&P 500 index will rise by 12% to 7700 points, with the core support factors being the sustained strength of corporate earnings and expectations of loose monetary policy.