Traders Market Weekly: Disconnect of World at War and Stock Market Euphoria

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    S&P futures vs fair value: +3.00. Nasdaq futures vs fair value: +64.00.

    Equity futures moved lower, reacting to the Employment Situation Report for January.
    The S&P 500 futures are up three points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 64 points and are trading 0.6% above fair value, and the Dow Jones Industrial Average futures are down 132 points and are trading 0.2% below fair value.


    Early Market
    Dow 38386.84 -133.00 (-0.35%)
    Nasdaq 15470.04 +108.40 (0.71%)
    SP 500 4918.28 +12.09 (0.25%)
    10-yr Note -32/32 3.998
    NYSE Adv 490 Dec 2220 Vol 121 mln
    Nasdaq Adv 1023 Dec 2908 Vol 970 mln

    Industry Watch
    Strong: Communication Services, Consumer Discretionary, Information Technology
    Weak: Real Estate, Utilities, Materials, Health Care, Consumer Staples

    Moving the Market

    — Shares of Meta Platforms (META) surging more than 20%, (AMZN) up more than 7% on earnings news
    — Apple (AAPL) down more than 2% after earnings
    — Reacting to a much stronger than expected January jobs report
    — Jump in yields in response to the jobs report

    The market opened to somewhat mixed action. The Dow Jones Industrial Average (-0.3%) and Russell 2000 (-1.5%) trade down and market breadth is negative, but the S&P 500 (+0.3%) and Nasdaq Composite (+0.8%) trade higher.

    This outperformance is due to big gains in shares of Meta Platforms (META 474.60, +79.72, +20.2%) and (AMZN 170.87, +11.60, +7.3%) following their pleasing earnings reports. Those gains are offsetting the earnings-related loss in Apple (AAPL 182.77, -4.07, -2.2%).

    Still, the overall vibe is negative as participants digest the much stronger than expected Employment Situation Report for January, which is not likely to persuade the Fed to cut rates as soon as the market hopes. A jump in yields in response to the report has also contributed to the negative bias. The 10-yr note yield back above 4.00%, up 15 basis points from yesterday.


    Factory orders rose 0.2% in December ( consensus 0.3%) following a 2.6% increase in November.

    The University of Michigan Consumer Sentiment survey rose to 79.0 in the final January reading (consensus 78.8) from 78.8.


    U.S. Job Market in January Delivered Much Stronger Key Metrics with Huge NFP Upside Revisions

    The January employment reports delivered much stronger key metrics than expected, nonfarm payrolls, private sector payrolls, the unemployment rate, and average hourly earnings were all stronger than expected. In particular payroll data where January non-farm payrolls came in 353K vs +180K expected and December was revised to +333K from+216K, November was revised to +173K from +164K, a combined 126,000 higher than previously reported. Updated population estimates decreased the estimated size of the civilian non-institutional population by 625,000 and the civilian labor force by 299,000 in December.

    U.S. Treasuries slid after the jobs report with expectations higher by a wide margin with payroll growth coming in twice as high as expected. There was a notable drop in the average workweek however to 34.1 hours from 34.3 hours. The key takeaway is that the Fed on balance will likely find as Chair Powell alluded to at this week’s FOMC that a March rate cut is unlikely.

    U.S. Job Market in January Delivered Much Stronger Key Metrics with Huge NFP Upside Revisions

    • This reply was modified 2 months, 1 week ago by TradersCom.


    Dow 38,654.42 134.58 0.35%
    S&P 500 4,958.61 52.42 1.07%
    Nasdaq 15,628.95 267.31 1.74%
    VIX 13.85 -0.03 -0.22%
    Gold 2,054.70 -16.40 -0.79%
    Oil 72.21 -1.61 -2.18%


    Feb 6-12, 2024 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Doing, OK? The
    [See the full post at: Traders Market Weekly: Disconnect of World at War and Stock Market Euphoria]

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