NEW YORK (Dow Jones) — After the previous day’s plunge, Wall Street is showing a mixed bias for the last trading day of the week. The trigger is a surprisingly strong US labor market report for January, which puts concerns about interest rates back into focus. With an increase in jobs of 467,000, the forecast of 150,000 was clearly exceeded. Economists had expected the omicron variant to have a clearly negative impact. With the strong data, a big 50 basis point rate hike at the March Federal Reserve meeting is more likely, a trader says. Fed funds futures are currently pricing in a 50 basis point hike with a 27 percent probability, up from 14 percent the previous day.
“The jobs report reinforces the Federal Reserve’s argument that the US economy is strong enough to withstand tighter monetary policy this year,” said Julian Koski, chief investment officer at New Age Alpha. At noon (local time), the Dow Jones index fell 0.3 percent to 35,014 points, and the S&P 500 rose 0.1 percent. The technology sector, which is otherwise so sensitive to interest rates, is supported by good figures from Amazon and Snap. The Nasdaq Composite is up 0.9 percent.
Amazon (+13.3%) and Snap (+48.1%) have presented compelling business credentials. On Thursday, the results of the technology giants Meta (Facebook) and Spotify were still frightening and heralded the descent of the overall market. “In the US, technology stocks occupy a significant place in indices,” said market strategist Mike Bell of JP Morgan Asset Management.
Despite the fact that the dice have actually been cast in US medium-term monetary policy, US data remain important as speculation is now brewing about the pace and extent of monetary tightening. The latest labor market data suggest that the Fed is taking a more bold approach. The wage increases are also in view: The increase in hourly wages underpins the need for higher key interest rates, according to retailers.
Earnings season continues the courses
Among the individual stocks, Unity Software is up 16.4 percent. The developer of video game software has exceeded expectations in terms of sales and earnings and has raised its sales forecast. Gopro advance by 2.0 percent. The camera manufacturer earned more than expected. Activision Blizzard’s business figures are described as predominantly disappointing. The shares of the game developer, which is being taken over by Microsoft, are still up 0.2 percent.
The business figures from News Corp are good, the stock is now losing 1.3 percent after initial gains. The company is the owner of Dow Jones, which also owns this news agency. The business figures of Ford (-10.9%) were received negatively, and the outlook was also criticized. Clorox plummeted 14.2 percent, the maker of disinfectant products missed market forecasts due to increased costs. Bill.com soared 32.4 percent, the financial software provider presented positive business figures and an optimistic outlook.
Erdl again more expensive
Oil prices are currently hardly stopping on their way up. WTI and Brent crude oil are both trading above $92 a barrel, making new seven-year highs. The trigger for the most recent price increase was a cold snap in Texas, which raised concerns about possible production outages in the largest US shale oil deposit, the Permian Basin. A year ago, oil production there was severely impaired due to a cold snap.
With the strong labor market data, bond prices are coming under pressure and yields are rising sharply. With this data, even the last doubters about a more bold pace of the Fed fell silent, it is said in bond trading – also with a view to the significant increase in hourly wages. At 1.93 percent, the ten-year return is again above the level before the pandemic.
The jobs data are also supportive for the dollar – with the prospect of rising interest rates. The dollar index rose 0.1 percent. The euro is able to maintain yesterday’s gains which took it above the $1.14 mark.
The price of gold is stagnating despite rising market interest rates and higher dollar prices. Rising hourly wages in the US could also fuel inflation, they say. This supports the price of the precious metal somewhat.
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INDEX last +/-% absolute +/-% YTD
DJIA 35,013.73 -0.3% -97.43 -3.7%
S&P 500 4,482.92 +0.1% 5.48 -5.9%
Nasdaq Comp. 14,000.60 +0.9% 121.78 -10.5%
Nasdaq-100 14,600.09 +0.7% 98.98 -10.5%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 1.30 +11.0 1.19 57.4
5 years 1.78 +10.6 1.67 51.7
7 years 1.90 +9.9 1.80 46.1
10 years 1.93 +9.1 1.84 41.8
30 years 2.22 +6.6 2.16 32.2
FOREX last +/- % Fri, 8:50 Thu, 17:32 % YTD
EUR/USD 1.1453 +0.1% 1.1465 1.1447 +0.7%
EUR/JPY 131.96 +0.3% 131.86 131.48 +0.8%
EUR/CHF 1.0590 +0.6% 1.0557 1.0512 +2.1%
EUR/GBP 0.8456 +0.5% 0.8440 0.8407 +0.6%
USD/JPY 115.23 +0.2% 115.01 114.83 +0.1%
GBP/USD 1.3543 -0.4% 1.3586 1.3617 +0.1%
USD/CNH (Offshore) 6.3637 +0.2% 6.3574 6.3540 +0.2%
Bitcoin
BTC/USD 40,325.24 +9.2% 37,882.86 36,863.60 -12.8%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 92.62 90.27 +2.6% 2.35 +23.7%
Brent/ICE 93.45 91.11 +2.6% 2.34 +20.6%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,806.82 1,805.36 +0.1% +1.46 -1.2%
Silver (Spot) 22.46 22.44 +0.1% +0.02 -3.6%
Platinum (Spot) 1,025.30 1,036.31 -1.1% -11.01 +5.7%
Copper Future 4.46 4.47 -0.3% -0.01 -0.1%
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(END) Dow Jones Newswires
February 04, 2022 12:07 ET (17:07 GMT)
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