A massive beat for January jobs gains, as well as a big revision for the December tally, has Fed rate bets accelerating and stocks moving lower Friday.
Updated at 8:44 am EST
U.S. equity futures traded mixed mixed Friday as investors looked to claw back losses from the worst day for the S&P 500 in more than a year on the back of a string of tech-sector earnings beats ahead of a key January jobs report prior to the start of trading.
A much stronger-than-expected reading, in fact, pulled stocks lower, with the Bureau for Labor Statistics noting that 467,000 new positions were created last month as wages rose 5.7% from last year. The December tally was also revised to a whopping 510,00 from the original estimate of 199,000.
A hawkish European Central Bank, as well as accelerating bets on a series of near-term rate hikes from the Federal Reserve, hit sentiment hard Thursday, with tech and other bellwether stocks pulled lower by the $237 billion wipe in Meta Platforms (FB) – Get Meta Platforms Inc. Class A Report shares, the biggest single-day decline, in market value terms, on record.
Friday’s session looks to get support, however, from better-than-expected earnings from Amazon (AMZN) – Get Amazon.com, Inc. Report, which topped Street forecasts and unveiled the first hike in prices for its Prime membership services in four years. Beaten-down social media stocks Pinterest (PINS) – Get Pinterest, Inc. Class A Report and SNAP (SNAP) – Get Snap, Inc. Class A Report were also on the move, helping set up a triple-digit opening bell gain for the Nasdaq.
Amazon, Snap, Ford, Pinterest, And Jobs Report – Five Things You Must Know
Oil prices were also in focus, with WTI crude futures rising past $92 for the first time since 2014 following another drawdown in domestic crude supplies, a stay-the-course decision on output from OPEC leaders in Vienna this week and the prospect of improved demand dynamics over the first half of the year.
In the meantime, futures tied to the Dow Jones Industrial Average are indicating a 180 point opening bell decline while those linked to the S&P 500 are priced for a 15 point fall from last night’s close at 4,477.44 points.
Nasdaq Composite futures are indicating a 20 point jump for the tech-focused benchmark as 10-year Treasury note yields rise to 1.901% following the jobs and wage report data.
Amazon shares are driving most of the Nasdaq gains, rising 12.2% after posting stronger-than-expected second quarter earnings late Thursday while unveiling a price increase for its Prime members.
Snap shares, too, are soaring higher, and could add nearly $20 billion to the message-app maker’s market value, following better-than-expected fourth quarter earnings and a robust near-term outlook.
Pinterest was also on the move, rising 12.85% after the image-sharing social media group posted better-than-expected fourth quarter earnings and its first-ever annual profit.
Bristol Myers Squibb (BMY) – Get Bristol-Myers Squibb Company Report gained 1% after stronger-than-expected fourth quarter earnings powered by impressive sales gains for its cancer and blood clot treatments.
On the downside, Ford (F) – Get Ford Motor Company Report fell 5.4% after the carmaker missed Street forecasts for its fourth quarter earnings amid supply chain disruptions and surging input costs.
Ford, which is deepening its investment in electric vehicle production and plans to double its current output by 2023, sees earnings growth this year of between 15% and 20%, but that failed to lift investors’ spirts after a weaker-than-expected fourth quarter tally of 26 cents per share that was well shy of analysts’ estimates.
In overseas trading, Thursday’s hawkish ECB turn, including comments from President Christine Lagarde that suggest the possibility of a 2022 rate hike, has the Stoxx 600 down 1.12% in mid-day trading in Frankfurt while the MSCI ex-Japan index added 1.07% by the close of trading in Singapore.
