Update 1130am EST: It’s all gone wrong after the initial promise of the jobs report. The spike in the US 10 year back above 1.6% didn’t help, neither did a closer inspection of the employment report, showing an increase in long term unemployed. Nasdaq now down 1.5%, S&P down 0.6% and Dow down by 0.2%.
Sector performance: Energy up 1%, Utilities up 0.45%, Real Estate down 1.3% and Tech down 1.2%
Winners and Losers: GAP up 4%, Cisco up 3%, Pepsi up 2%, KraftHeinz up 2%Tesla down 12%, Docusign down 10%, Zoom Video down 8%, NVIDIA down 7%, American Airlines down 9%, United Airlines down 9%.
Markets continue to whipsaw without any concrete direction as Fed Chair Powell failed to provide succour to the bulls and a strong jobs report sees yields march on. Next week sees a plethora of US bond auctions which will give further guidance to markets as to how to react. Powell was relatively unconcerned about inflation and left the market to figure it out for themselves. Non-farm payrolls were surprisingly strong on Friday and caused equity markets to whipsaw in looking for direction post the release.
The Dollar took encouragement and breached 1.20 versus the Euro, currently at 1.1916 as the US 10 Year yield heads back above1.60%, currently at 1.61%. Oil continues to outperform with OPEC+ incentivising a spike above $65 for WTI, currently trading at $65.29 a gain of 2%.
All this puts equity markets under the microscope to see how investors cope with rising oil, commodity, dollar and inflation headwinds.
European markets are mixed with the Dax down 0.3% but the FTSE up 1.4% and Euro Stoxx up 0.8%
US futures are turning positive post jobs report with Nasdaq up 0.5% and Dow Jones and S&P up 0.7%
S&P 500 News
US Nonfarm payrolls show a strong outperformance versus expectations 379k versus 200k expected, previous was 49k.
US unemployment rate 6.2% versus expected 6.3% and prior 6.3%.
The debate begins in the US Senate on President Biden’s $1.9 trillion stimulus bill.
China says will push the loan rate lower and boost lending to small business by over 30% in 2021. China Banking and Insurance Regulatory Commission (CBIRC) says is very worried about bubbles bursting in foreign markets and the impacts of bubbles on the Chinese property sector-Reuters.
China says will aim to accelerate free trade talks with South Korea and Japan. China also says aims for 2021 GDP growth above 6%.
OPEC+ decides not to increase oil output in April in an unexpected move. Oil prices shoot higher.
Taiwan Semi-Conductor, an Apple iPhone supplier, sees CLSA investment bank put a strong upside price target of c. $29 (given Taiwan dollar exchange rate)-CNBC.
Connecticut is to relax coronavirus restrictions in two weeks allowing churches, theatres and other businesses to open. But the mask mandate will still be in place.
Siemens Energy and Alstom are top picks by Morgan Stanley in a green economy research note issued on Wednesday.
IMAX results missed analyst expectations by a small margin on Friday. Revenue beat estimates. Shares are up 1% in pre-market.
FuboTV CEO David Gandler is to speak to benzinga on Friday at 9am EST.
Tesla: CNBC reports billionaire investor Ron Baron has sold 1.8 million shares of Tesla since August from his firm on behalf of client portfolios as the stock was becoming too large a percentage in some portfolios. Baron remains bullish on Tesla with a $2,000 price target over the next ten years.
CoreLogic (CLGX) and Core Star Group (CSGP): Core Star Group ceases in its plan to buy CoreLogic citing rising interest rates.
Big Lots reports quarterly profit 9c above expectations, revenue matches forecasts. conference call ongoing at the time of writing 0830 EST.
Costco missed estimates on EPS, $2.14 versus $2.45 expected, revenue beat forecasts, digital sales up 76%. Shares down 1.5% in pre-market.
Instacart is considering a direct stock market listing rather than an IPO as it is concerned by recent IPO undervaluations, Reuters citing a source.
Broadcom shares were lower on Thursday after chip sales came in below estimates. In line with semi conductor chip problems globally.
GAP beat EPS expectations by 10c, $0.28 eps for Q4. Shares are up over 3% in pre-market.
Boeing: Reuters reports Boeing approached a group of banks for a revolving $4 billion credit facility, citing a person familiar with the matter. Canaccord Genuity raised its price target for Boeing on Friday to $275 from $200.
Norwegian Cruise Lines announced an offering of nearly 48 million shares. Shares are down 7% in pre-market.
Virgin Galactic: Chamath Palihapitiya sold all his personal holding in SPCE. He still owns shares through an investment partnership with Ian Osborne-CNBC.
Ups and downs
Broadcom Inc: JPMorgan, Mizuho, RBC, and Morgan Stanley all raise price target.
American Eagle Outfitters: CFRA raises from hold to buy
Costco: Jefferies, Citigroup, JPMorgan, and DA Davidson cuts price target.
GAP Inc: Jefferies and JPMorgan raise price targets.
Kroger Co: Citigroup, Morgan Stanley, and Scotiabank raise price targets.
Microsoft: Morgan Stanley raises price target.
Nikola Corp: JPMorgan lowers price target.
Provident Financial Services: RBC raises price target.
PLUS Power: JPMorgan lowers price target.
Sensonics SENS: Raymond James downgrades.
Economic data due
Nothing major to report now that Non farm is out of the way!
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