Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Marketmind: Troubles come in threes...or more

Published 02/04/2022, 03:13 AM
Updated 02/04/2022, 03:40 AM
© Reuters. FILE PHOTO: European Central Bank (ECB) headquarters building is seen during sunset in Frankfurt, Germany, January 5, 2022. REUTERS/Kai Pfaffenbach
AMZN
-
BMY
-
NFLX
-
SNY
-
META
-
CABGY
-
SNAP
-
SPOT
-

A look at the day ahead in markets from Sujata Rao.

Misfortunes don't come singly, so the idiom goes, and markets are being whiplashed by a whole slew of negatives, that could see this month turn again into the nightmare that was January.

For now, stocks are attempting to claw their way higher, after a profits-beat by Amazon (NASDAQ:AMZN) lifted its shares 17% after-hours, following a 7% decline during Thursday's trading session.

Some other tech peers saw similar gyrations, with buoyant earnings boosting Snap (NYSE:SNAP) shares 50% after close of trade.

Asia choses to take its cue from Wall Street's after-hours upswing, rather than the earlier 3.7% Nasdaq drop, European markets are opening higher and U.S. indexes are tipped to open with gains on Friday.

But will it last?

The earnings hits at Facebook (NASDAQ:FB) owner Meta (the $200 billion wiped off its value on Thursday was the biggest ever), Spotify (NYSE:SPOT), and Netflix (NASDAQ:NFLX) are worrying, coming as they do when the Federal Reserve is bent on tightening policy in coming months.

GRAPHIC: A record-setting plunge, https://graphics.reuters.com/META-ZUCKERBERG/byvrjxmowve/chart.png Thursday's shock partly emanated from Europe -- aside from a Bank of England rate rise, the hitherto dovish ECB appeared to change tack and concede a 2022 rate hike was not out of bounds after all.

The volte face came after a record-high euro zone inflation print. And as oil prices surged past $90 a barrel, expect no relief on that front.

GRAPHIC: HICP, https://fingfx.thomsonreuters.com/gfx/mkt/gkplgjbglvb/Pasted%20image%201643926086314.png Bank analysts are now falling over each other in their rush to predict one, two or even three ECB hikes this year. So sub-zero euro zone yields are vanishing fast, with Dutch five-year yields just climbing above 0% for the first time since 2018.

It has somewhat taken markets' focus off the U.S. monthly jobs data due on Friday. But a dire private payrolls reading from the ADP earlier this week -- showing 300,000 jobs vanishing versus forecasts for 180,000 jobs added -- has stoked fears of a similarly awful set of numbers on Friday.

Yet the payrolls, just like the ongoing company earnings season, may show unrelenting cost pressures -- in December payrolls, average hourly earnings rose to 4.7% and forecasts are January will bring a rise above 5%.

Key developments that should provide more direction to markets on Friday:

-UK's Johnson seeks to reset beleaguered premiership

-German industrial orders Dec

-U.S. non-farm payrolls

© Reuters. FILE PHOTO: European Central Bank (ECB) headquarters building is seen during sunset in Frankfurt, Germany, January 5, 2022. REUTERS/Kai Pfaffenbach

-U.S. earnings: Bristol Myers (NYSE:BMY) Squibb

-European earnings: Carlsberg (OTC:CABGY), Sanofi (NASDAQ:SNY),

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.