This content was published on February 4, 2022 – 17:44
(Bloomberg) — U.S. Treasuries fell and stocks struggled for direction after a better-than-expected U.S. jobs report increased bets of tighter monetary policy, eroding some bullish sentiment from Amazon.com Inc. earnings.
The S&P 500 gained, erasing an earlier loss, while the Nasdaq 100 added 0.9% with Amazon up 14% on a price hike for Prime memberships. Meanwhile, Europe’s Stoxx 600 declined as rate-hike bets reduced risk appetite. The dollar rose.
U.S. employers added more jobs than forecast last month, despite a surge in Covid-19 infections and related business closures. U.S. payrolls came in higher than all economists expected at 467,000 — a three-month high — while average hourly earnings also rose a higher-than-expected 0.7% month over month.
The report is likely to increase conviction in the Federal Reserve’s path forward.
“A strong jobs report, along with elevated inflationary economic data that we’ve seen recently, could boost expectations that we’ll see a 50-basis point rate increase at the March meeting,” said Brian Price, head of investment management for Commonwealth Financial Network. “I still believe that 25 basis points is the base case at this point but 50 is not off the table either.”
It’s been a volatile week in markets as investors were jolted by weak numbers at U.S. tech giants including Facebook-owner Meta Platforms Inc., which wiped more than $250 billion from its market value on Thursday. However, positive earnings from Amazon helped lift sentiment, with the online marketplace and tech company adding more than $150 billion to its market cap.
“It seems like each day we wake up to, ‘Thank you sir, may I have another?’ as a few tech blowups drag down the overall market,” said Mike Bailey, director of research at FBB Capital Partners. “There is an interesting behavioral metric where one bad thing requires four to five good things to make up for it.”
Here’s what else Wall Street saying Friday:
“Hopefully now that the week is coming to a close, we’re seeing that the economy is still strong based on this jobs report, that people can take a breath and really reassess what is the economic environment that we’re going into in the year ahead.” — Lindsey Bell, chief markets and money strategist at Ally
“The January employment report was strong overall, informs us that businesses are willing to look through the Omicron shock (which is actually news), and reinforces the case for the Fed tightening.” — Gerard MacDonell, analyst at 22V Research
“It was always going to be a surprise …….