Home » Wall Street pays for positive US employment shock. The Nasdaq also discounts sells on Amazon and Alphabet

Wall Street pays for positive US employment shock. The Nasdaq also discounts sells on Amazon and Alphabet

by admin
Wall Street pays for positive US employment shock.  The Nasdaq also discounts sells on Amazon and Alphabet

Good news for the economy, bad news for the markets: the positive shock that arrived on Wall Street with the publication of the US employment report in January freezes investors and traders, who are starting to have more than a few doubts about the narrative according to which Jerome’s Fed Powell would be close to saying stop the anti-inflation rate hikes.

Probably not even Powell expected such positive numbers.

The no-farm payrolls report found that the US economy created 517,000 new jobs last month, well above the consensus-expected growth of 185,000 new payrolls, and at a much stronger pace even than the 223,000 new ones. jobs created in December.

Not only. The unemployment rate fell from 3.5% in December to 3.4%, compared with a rise to 3.6% expected.

Keep an eye on the wages component, carefully monitored as it is a crucial parameter that measures the inflation trend.

Average hourly wages rose 0.3% month-on-month in January, as expected. On an annual basis, however, growth was 4.4%, versus the +4.3% expected. Of course, there was a slowdown compared to +4.6% in December. But not as expected.

And the fear now on the markets is that an overly dovish interpretation has been given to the words that Jerome Powell uttered the day before yesterday, in the press conference following the announcement on rates by the Fomc, the monetary policy arm of the Federal Reserve .

The day before yesterday, the US central bank announced that it had raised US interest rates by 25 basis points, to a new range of between 4.5% and 4.75%, a record since October 2007. The announced increase is It was the eighth since the US central bank began raising rates in March 2022.

See also  Bmw and Mercedes, the sales of premium brands resume the race

Although the Fed helmsman has repeatedly tried to reiterate his firm intention to continue the fight against inflation, some spoke of a dovish turn, referring to some statements and admissions.

In reality, Powell himself involuntarily rekindled expectations-hopes about the end of the cycle of rate hikes, stating that “we can now say, I believe for the first time, that the disinflationary process has begun”. Powell also said that the US terminal rate could remain below the 5% threshold.

In this regard, it is worth mentioning the comment released by Jeffrey Rosenberg, an analyst at BlackRock, after the announcement on the Fed’s rates and the words of Jerome Powell:

“There’s a real discrepancy between what (Powell) said, what came out of the release, maybe between what Powell wanted to say and what the markets decided to hear.”

That said, Wall Street is now cutting losses. At approximately 15.50 Italian time, the Dow Jones marks a fall of more than 80 points (-0.24%); the S&P 500 is down 0.77%, the Nasdaq is down 0.95%.

It should be remembered that the effect of the quarterly reports of the three Big Tech Usa Alphabet and Amazon also weighs on the Nasdaq. The Apple title instead resets the losses and increases by about 0.70%.

Amazon reported a quarterly report that it showed earnings per share of 3 cents and revenue of $149.2 billion in the fourth quarter of 2022, better than the $145.2 billion expected, according to analysts polled by Refinitiv.

It is not clear whether the EPS of 3 cents can be compared to the 18 cents per share expected by the consensus.

See also  quarterly results beat expectations, record of assets under management

The American e-commerce giant announced an unconvincing guidance, from which emerged, for the first quarter of 2023, the estimate of a turnover of between $121 billion and $126 billion, growing on an annual basis between 4% and 8%, compared to the $125.1 billion expected by analysts.

The stock fell 4.3% in Wall Street trading, discounting full-year 2022 revenue data, which indicated a 9% growth rate, the lowest since Amazon went public.

Apple has communicated a quarterly that has disappointed the expectations of analysts on several fronts, and that has seen earnings and sales in decline on an annual basis.

The CEO’s Tim Cook-led giant’s EPS settled at $1.88 in the fourth quarter of 2022, below consensus expectations of $1.94 per share and down 10.9% year-on-year.

Revenue was $117.15 billion, lower than the $121.10 billion forecast, down 5.49% year over year, down for the first time since 2019. Not only that. The decline was confirmed as the sharpest since 2016.

Alphabet, the holding company that owns Google, announced earnings and revenue for the fourth quarter of 2022 below consensus estimates. Fourth quarter earnings per share were $1.05, lower than the $1.18 expected by analysts polled by Refinitiv.

Revenue was $76.05 billion, slightly below the expected $76.53 billion. YouTube’s advertising revenue came in at $7.96 billion versus an expected $8.25 billion, according to StreetAccount estimates. Google Cloud revenue was $7.32 billion, down from the $7.43 billion forecast.

The stock yields approximately 2.5%.

Overall, global equities are trying to digest the announcements from central banks over the past couple of days.

See also  "The worst problem of my life"

Yesterday the ECB led by Christine Lagarde announced that it had decided to “raise by 50 basis points the interest rates on the main refinancing operations, on the marginal lending facility and on the deposit facility will be raised respectively to 3.00%, at 3.25% and 2.50%”.

The Eurotower confirmed its intention to proceed with another 50 basis point monetary tightening at the next Governing Council meeting scheduled for March, continuing its battle against euro area inflation, which remains too high compared to the ECB’s target of 2%.

Also yesterday, the Bank of England announced it had raised UK interest rates to a 14-year record of 4%. Monetary tightening was +25 basis points, as expected.

However, Wall Street is preparing to end yet another positive week. The Nasdaq Composite is still the protagonist, which gained more than 3%, and which is oriented to conclude the fifth consecutive week of gains.

On a weekly basis, the S&P 500 is up more than 1%. The Dow Jones is instead the US stock index that underperformed, down by 0.1%.

On the US government bond market, the publication of the US employment report is immediately priced in: 10-year Treasury rates jumped to 3.512% after the release of the data, jumping by 11 basis points; two-year rates shot up 16 basis points to 4.253%.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy