“The AI revolution is here, and tech company earnings further support the bullish thesis,” Wedbush Securities’ Dan Ives said in a tweet. Microsoft is leading the charge, and now the rest of the tech companies – Google, Amazon, Meta, and Apple – are also following this path and joining the party. Big Tech has an A+ earnings season. The 1995 moment was just beginning. ”
Atlassian fell 14.7% in New York after disappointing cloud revenue results and guidance. Additionally, there were reports in November that one of Cloudflare’s internal Atlassian servers was hacked. Atlassian plans to retire its server products this month as part of its plan to increase its focus on the cloud.
Apple has largely recovered from its steep early drop as it begins selling its first Vision Pro headset in the United States. This decline reflects concerns about slowing sales in China. “We still think China is a huge opportunity for Apple,” Gene Munster, co-founder and managing partner of Deepwater Asset Management, told Bloomberg Radio. “I think this storm will pass.”
Bond yields rose after the shocking announcement that the U.S. created 353,000 new jobs last month, almost twice as many as expected, and the unemployment rate remained at 3.7%. Wages have exploded, rising 0.6% month-on-month and 4.5% for the year.
“The dovish traders have certainly been using the haymakers this morning and are dithering,” Santander chief economist Stephen Stanley said.
The probability of a quarter-point rate cut in March fell to 20.5% from 70% the previous month, according to CME’s FedWatch tool. The probability of an interest rate cut in May was 58.6%, down slightly from 59.6% the day before.
“I expect the FOMC to remain on hold until November and only cut rates by 50 basis points this year,” Stanley said. “My case has certainly improved this morning, but I expect it to remain an anomaly. .”
Evercore ISI’s Krishna Guha remains optimistic the Fed will cut rates significantly this year, but his baseline is five cuts, but the market may need to be more patient. “The Fed’s internal tilt was there in June, before the report was released. This data will further strengthen that trend.”
Analyzing US employment data: ‘Breaking numbers’ Early views suggest March rate cut ‘dead’ as employment unexpectedly shifts into higher gear for the start of 2024 , it will probably be the same in May.
market highlights
ASX futures were down 54 points, or 0.7%, at 7,608 around 8am (AEDT).
- Australian Dollar -0.9% to USD 65.12
- Bitcoin -0.2% $43,024 at 8:50am AEDT
- 4pm Wall Street: Dow +0.4% S&P +1.07% NASDAQ +1.7%
- New York: BHP -1.4% Rio -2.3% Atlassian -14.7%
- Tesla -0.5% Meta +20.3% Amazon +7.9% NVIDIA +5%
- Microsoft +1.8% Apple -0.5% Netflix -0.5%
- NYSE Fang + Index +4.9%
- VIX -0.2% QQQ +1.7% TLT -2.2%
- Stoxx 50 +0.3% FTSE -0.1% DAX +0.4% CAC +0.1%
- As of 4:59 p.m. in New York, spot gold was -0.7% at USD 2,039.76 per ounce.
- Brent Crude Oil -1.6%, $77.42 per barrel at 4:47 p.m. New York City.
- Iron ore -4.1% at $125.60 per tonne
- 10-year yield: US 4.02% Australia 3.97% Germany 2.24%
- U.S. prices as of 4:58 p.m. New York
what drives the market
Meta alone is expected to increase its market cap by about $200 billion in the final trade of the trading week. This would be the largest increase in market value in a single session, surpassing the $190 billion in gains made by Apple and Amazon in 2022.
According to a report by Bloomberg, Morgan Stanley analyst Brian Nowak praised Meta’s generative AI pipeline and said the company’s “solid execution, accelerated growth, and improved capital structure efficiency will lead to The outlook is improving,” he added.
Bank of America raised Meta’s price target to $510. Oppenheimer raised the target to $525. Meta’s closing price on Thursday was $394.78. Friday’s closing price was $474.99.
Chanticleer: Why 7 Epic Stocks Are Not Equally Great The returns of 5 of 7 Epic Tech Stocks highlight their superiority. However, there are differences in outlook and valuation that investors must consider.
Analyzing US employment data
american bank He said hiring is in full swing. “In addition to strong hiring in January, we have revised upwards by a total of 126,000 jobs over the past two months, with most of that increase occurring in December (333,000 compared to 216,000 originally). has broken the trend of downward revisions seen through most of last year, with payroll employment increasing by a staggering 289,000 on average over the past three months, up from 207,000 in October. , employment data shows little sign of an imminent slowdown in activity.
Derek Holt of Scotiabank He said that Fed Chairman Jerome Powell’s talk of a cooling job market has been a direct hit. “The U.S. job market beat expectations and entered 2024 with harsh headlines that say the numbers will be disappointing, if not negative, especially due to weather and annual revisions. 1st Quarter GDP Combined with early results on the ‘nowcast’, this overall set of estimates throws cold water on Fed easing in March or May, hurting bond markets. ”
Holt also said that a very strong job market and economy “makes the trade-off of not expecting the Fed to cut rates any time soon more than acceptable.” In fact, if this situation continues, we cannot rule out the possibility of another rate hike. In any case, as I have long argued, but with increasing confidence, I think the market continues to price in rate cuts as premature and too large. ”
Bill Adams, Chief Economist, Comerica Bank He said the Fed is likely to discount the acceleration in wage growth in the latest jobs report, but that it is difficult to explain away January’s strong job growth. “This will make Fed policymakers even less inclined to lower the federal funds target in their next decision in March. will need to occur.
“The Fed will likely begin lowering the federal funds target with a decision in May or June. Comerica’s forecast is that the first rate cut is expected in June.”
Trump won’t reappoint Powell as Fed chief The former president, who appointed Jerome Powell as Fed chairman, said he believed Powell would lower interest rates to help Joe Biden’s re-election bid.
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