Last Updated: 4:00 PM EST
Stock indices finished today’s trading session in the red after a hotter-than-expected non-farm payrolls report. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) fell 0.38%, 1.04%, and 1.79%, respectively.
The consumer discretionary sector (XLY) was the session’s laggard, as it lost 3.09%. Conversely, the financial sector (XLF) was the session’s leader, with a loss of 0.12%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.54%. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.31%. This brings the spread between them to -77 basis points.
Compared to yesterday, the market is pricing in a higher chance of a higher Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 5% to 5.25% increased to 53.7% compared to yesterday’s expectations of 31.9%.
In addition, the market is now also assigning a 30% probability to a range of 4.75% to 5%. For reference, investors had assigned a 55.8% chance yesterday.
Last Updated: 2:00PM EST
Stocks are in the red as we head into the final two hours of Friday’s trading session. As of 2:00 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 0.4%, 0.9%, and 1.4%, respectively.
Investors who may be on the lookout for a wage-price spiral may have reason to be concerned after the Bureau of Labor Statistics released its Average Hourly Earnings report, which measures the month-over-month change in wages.
A wage-price spiral is caused when the price of goods increases as a result of higher wages but also leads to workers demanding higher wages as a result of the higher prices. As a result, it creates a perpetual loop of price and wage increases.
A way investors can gauge the presence of a wage-price spiral is by comparing average hourly earnings to inflation. If earnings are higher than inflation, it could be a warning sign that the loop is beginning to form.
The good news is that wages grew 0.3% in January compared to the previous month, in line with forecasts. However, the bad news is that the most recent consumer price index fell 0.1% month-over-month. In addition, when looking at the core consumer price index, the last reading was an increase of 0.3% month-over-month. Although this matched wage growth, it’s still not ideal with regard to a wage-price spiral.
As a result, investors should keep these wage figures in mind for when the next CPI report is released in order to compare the results.
Last Updated: 10:50AM EST
Equity markets are relatively flat as they cut their losses from the open. On Friday, the Institute for Supply Management released its monthly report for the ISM Non-Manufacturing Purchasing Managers’ Index, which measures the overall economic condition of the non-manufacturing sector.
A number over 50 represents an expansion, whereas anything below 50 signals a contraction. The report came in at 55.2, better than the expected 50.4 and higher than last month’s reading of 49.2.
It’s worth noting that this indicator has been in an overall downtrend since peaking in December 2021, when it hit a high of 69.1. If this trend continues, it might not take long before the non-manufacturing sector enters into a period of sustained contraction.
Indeed, the ISM Non-Manufacturing Employment report came in at 50, indicating that the number of jobs remained flat after contracting in the previous month.
Last updated: 9:39AM EST
Stocks opened in the red on Friday as investors struggled to digest the strong labor data and disappointing earnings from tech giants.
Nasdaq 100 (NDX) slumped by 1.6% while the S&P 500 (SPX) dropped 0.9%, and the Dow Jones Industrial Average (DJIA) is down 0.3%, as of 9:39 a.m. EST, Friday.
Last updated: 8:40AM EST
U.S. futures continued to be in the red after the U.S. non-farm payrolls report indicated that unemployment ticked down in January to 3.4%, beating estimates of 3.6% and falling from 3.5% in December.
The U.S. added 517,000 jobs in January, better than estimates of the addition of 185,000 jobs and up from 260,000 in December.
Nasdaq 100 (NDX) futures are down today by 1.8% dragged down by weak results from tech giants while futures on the S&P 500 (SPX) slumped 0.8%, and those on the Dow Jones Industrial Average (DJIA) are down 0.4%, as of 8:40 a.m. EST, Friday.
First published: 5:30AM EST
Nasdaq 100 (NDX) futures are down today by 1.61% dragged down by weak results from tech giants Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN).
Futures on the S&P 500 (SPX) are in the red at 0.73%, and those on the Dow Jones Industrial Average (DJIA) are down 0.27%, as of 4.50 a.m. EST, Friday.
While revenues missed slightly, Alphabet’s earnings came in meaningfully lower than the consensus. At the same time, Apple reported a narrower earnings miss of 6 cents per share but fell short of revenue expectations. Meanwhile, e-commerce giant Amazon posted mixed results. Also, both Ford Motor Company (NYSE:F) and Starbucks (NASDAQ:SBUX) missed analysts’ earnings estimates. The weak corporate earnings announced yesterday have put a brake on the positive momentum of the market witnessed during the last few trading sessions.
Along with closely watching the management commentary from tech giants, investors are looking forward to the figures of January’s non-farm payroll to be released today, at 8:30 a.m. EST by the U.S. Bureau of Labor Statistics.
A majority of European indices are in the red at midday today, as the markets react to the 50-basis point price hike announced by both the European Central Bank (ECB) and the Bank of England (BOE). European investors are also awaiting the final January PMI (purchasing managers’ index) numbers and December producer price figures from the eurozone to be announced today.
Mixed Trends in Asia-Pacific Markets
Hong Kong’s Hang Seng index closed down 1.36%. Meanwhile, Mainland China’s Shanghai Composite and Shenzhen Component ended down 0.68% and 0.36%, respectively.
Japan’s Nikkei 225 gained 0.39% and Topix closed up 0.26%.
Interestingly, India’s Nifty 50 Index closed the day in the green, up 1.38% after Adani Group stocks pared losses from the last few trading days and helped lift the index higher. The statement by the Indian Finance Minister that both LIC and SBI’s exposure to Adani Group was within permissible limits boosted the group’s stock.
Interested in more economic insights? Tune in to our LIVE webinar.
