Economist: If the non-agricultural sector is revised down sharply in July, US stocks will show a V-shaped trend during the day

Jason Tang, Senior Economist at TradingKey, said that the August non-farm payrolls data is unlikely to rise or fall significantly, given the trend of various industries offsetting each other. We believe that the main risk to the U.S. financial marekt from this non-farm payrolls report is not the August data itself, but whether the July data faces a significant downward revision. If the July data is significantly downgraded, we expect the U.S. stock market to experience a significant decline, followed by a rebound on the same day. Specifically, a significant downgrade would signal a weak labor market, prompting investors to engage in the "economic slowdown trade". This could cause U.S. stock index futures to weaken before the market and U.S. stocks to fall after the opening bell. Then the "economic slowdown trade" could turn into a "rate cut trade", ultimately driving US stocks back from intraday lows.