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- Friday January 5 @ 9:00am
Friday January 5 @ 9:00am
Stocks volatile but trying to rally after a hot jobs report
Matthew
January 05, 2024
"I don't call it technical analysis anymore, I call it data visualization."
📈 The Markets Overnight
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Down a bit
🛢 Crude Oil: Up strongly
💵 Dollar: Up slightly
🧐 Yields: Up a lot
🔮 Crypto: Down
🌏 Major Global Catalysts
Non-Farm Payrolls comes in hot. (link)
💵 Economic Reports and Events Today
Consensus forecasts shown
8:30am Average Hourly Earnings m/m 0.3%, 0.4% reported. Change in the price businesses pay for labor, excluding the farming industry. (link)
8:30am Non-Farm Employment Change 168K, 216K reported. Change in the number of employed people during the previous month, excluding the farming industry. (link)
8:30am Unemployment Rate 3.8%, 3.7% reported. Percentage of the total work force that is unemployed and actively seeking employment during the previous month. (link)
10:00am ISM Services PMI 52.5 Level of a diffusion index based on a survey of about 300 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. (link)
10:00am Factory Orders m/m 2.0% Change in the total value of new purchase orders placed with manufacturers. (link)
1:30pm FOMC Member Barkin Speaks at the Maryland Bankers Association, in Annapolis. (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
None
Pre-Market Monday :
HELE Helen Of Troy EPS 2.75 Rev 544.39M (link)
🔮 Selected Analyst Ratings Changes
PLTR Palantir Technologies Jefferies Downgrades to Underperform Lowers to 13.00
BOOT Boot Barn Holdings UBS Upgrades to Buy Targets 108.00
CCL Carnival Wells Fargo Upgrades to Overweight Maintains 22.00
OKTA Okta Jefferies Downgrades to Hold Raises to 95.00
📉 Stocks In Play
MPW Medical Properties Trust Down 21% after announcing it will give additional support to a major client that owes the company $50M. (link)
COST Costco Up 1% as December same store sales data shows growing revenue on a holiday shopping surge. (link)
PTON Peloton Interactive Adding 5% to yesterday's 14% gain on TikTok partnership news. (link)
PLTR Palantir Down 4% on an analyst downgrade. (link)
💬 Commentary
The downward momentum we've seen in the market this week slowed somewhat and reversed early in the day before rolling over and resuming the downward trajectory with the major indices closing on the lows. Hot employment numbers reported in the pre-market added to uncertainty about the Fed's timing of rate cuts adding to the volatility. The Nasdaq was the weakest of the major indices, but down only 0.5%, mainly on Amazon's 2.6% decline related to increasing competition from TikTok, and Apple's 1.3% decline on another analyst downgrade. The energy sector was the weak link today due to a huge build in gasoline inventories, followed by tech, and not surprisingly, consumer discretionary. Healthcare and financials topped the few sectors that closed higher on the day.
The market seems to be seeking a catalyst to pull it out of its New Year's funk, but this morning’s Non-Farm Payrolls report is fuel for the bears. The report came in hot, confirming the belief that the Fed will need to hold rates higher for longer. A strong jobs report is good for the economy, of course, but it’s not good for a market that desperately wants to see lower rates. Stocks initially sold off on the report, with small caps taking an outsized hit, down up to 1.2%, as REITs and financials see strong selling. The market was spooked by this data, but we've already seen some buying as the major indices and many popular stocks are moving into a level that should start to look very enticing to the bulls. So, we'll be watching very closely for confirmation of the potential capitulation and rally we're witnessing this morning. This could be the "buy the dip" opportunity, but the situation is very dynamic right now, and we'd like to see strength continue through the open before committing more capital as the bond market is still showing some weakness on rising yields.
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