Hi, dear traders! On the final day of the week, traders will find a missing piece of the puzzle in the disinflation picture. Today the economic calendar is full of data to shed light on the strongest sector, the US labor market. The employment data is not only a missing piece but also a market catalyst. Earlier, the largest Silicon Valley’s companies spoiled market sentiment with tepid corporate reports.

Yesterday, Wall Street closed with notable gains. Investors were encouraged to find out dovish signals in Powell’s speech. Meta also improved market sentiment.
Not all benchmark indices were lucky yesterday. The Dow Jones was weighed down by a decline in the healthcare stocks and closed 0.11% down. The Nasdaq again logged the strongest performance and printed a gain of 3.25%. The S&P 500 climbed by 1.47% to close at 4,179.
The major stock indices were subdued in the New York pre-market. They shed earlier gains. The S&P 500 is expected to trade in the corridor between 4,070 and 4,140.
Yesterday, both the Nasdaq and the S&P 500 closed with a rally and jumped to the highest level in 5 months. Investors were digesting the Fed’s policy decision made on Wednesday and Powell’s comments. He acknowledged the progress in the fight against inflation.
The companies with mega capitalization such as Apple, Amazon, and Alphabet advanced considerably by 3.7 – 7%.

The telecom sector surged by 6.7%, the biggest intraday growth for almost three years. Meta shares with its 22.3% growth mainly propelled the rally. This year, the company announced strict control over spending and a 40 billion-dollar stock buyback.

The energy sector, one of the most successful last year, dropped by 2.5%. The healthcare sector slipped by 0.7%.

UnitedHealth shares tumbled by 5.3% after the US government proposed Medicare Advantage reimbursement rates below analyst estimates. This also affected the Dow Jones. Merck shares fell by 3.3% as the drug manufacturer provided a revenue forecast for 2023 lower than Wall Street’s consensus.

Interestingly, there is a glimmer of hope for investors. The 50-day moving average of the S&P 500 climbed above the 200-day moving average. This formed a Gold Cross pattern. It is viewed as a technical bullish sign for the short term.

Nevertheless, the late session yesterday challenged optimism and pushed the benchmark indices down in the pre-market on Friday. Futures on the stock indices lost ground after disappointing financial records by the companies with mega capitalization, including Apple, Amazon, and Alphabet. The high-tech giants lost 3.5-6% in the pre-market.

Apple predicts another decline in sales revenue in the first quarter. Amazon warned that its operating profit could tumble to zero this quarter. Google’s parent company Amazon fell short of expectations in terms of financial results for the fourth quarter.
Besides, the employment data worsened market sentiment.
The US economy unexpectedly created 517,000 jobs in January. The actual reading is three times as big as the consensus. Analysts had projected a modest growth of 185,000. The latest figure is the largest since July and is higher than an average increase of 401,000 per month in 2022. The most robust employment was recorded in the entertainment and hospitality sector. The unemployment rate in the US also dipped lower than expected. It slipped to 3.4% in January, lower than the consensus of 3.6%. It is the lowest reading since May 1969. The strong non-farm payrolls were published after a sharp decrease in weekly jobless claims. It proves tense conditions in the labor market.

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00:00 INTRO
00:45 S&P500
01:31 USA
02:25 QUOTES
04:16 US NONFARM PAYROLLS (JANUARY)
04:50 US UNEMPLOYMENT RATE (JANUARY)
06:05 USDX
07:44 USD | CAD
08:05 OIL
09:02 BTC | USD