Friday’s jobs report will be a big signal for a market looking for good news

When the December jobs report hits Friday morning, markets will be looking for a number that hits a sweet spot between not so robust as to trigger more interest rate hikes but not so slow as to raise worries about the economy.

In market jargon, that quest for the middle is sometimes referred to as a “Goldilocks” number (not too hot; not too cold) that can be difficult to find.

But in this case, the good news is that the range looks to be pretty wide with a higher probability of good news than bad.

While the Dow Jones estimate is for a nonfarm payrolls gain of 170,000, Art Hogan, chief market strategist at B. Riley Financial, said the acceptable range is really something like 100,000-250,000.

“I just feel like we have a much better receptivity to good news being good news now that we know that that’s not going to induce another rate hike,” Hogan said. “It’s just going to push off a rate cut.”

As things stand, markets figure the Federal Reserve is done hiking rates and could start cutting as early as March, eventually lopping off 1.5 percentage points from its benchmark rate by the end of 2024. Recent news coming out of the Fed is pushing back at least a little on that anticipated trajectory, and a strong number could dampen the likelihood of policy easing that quickly.

“If we were to get above [250,000], then people might look at that and say we have to cancel March as a potential rate cut and maybe take one off the table for this year,” Hogan said. “Frankly, we know we’re at a place now where the Fed is done raising rates. So if that’s the case, clearly good news could be good news. It’s just how good the news could be before you get concerned that some of the hope for rate cuts might get pushed out into the back half of the year.”

Markets have gotten off to a rocky start in the new year as rate-sensitive Big…