The key updates crucial for investors to commence their trading day are as follows:
1. Stock Market
This Friday morning, stock futures indicate an upward trend, concluding a week marked by turbulence. Following a sell-off and subsequent recovery related to the Federal Reserve, the Dow Jones Industrial Average has recorded a 1% increase this week.
The broader S&P 500 has seen a 0.3% rise, while the Nasdaq Composite, primarily focused on technology stocks, has experienced a 0.6% decline. The Nasdaq is currently digesting significant developments in the technology sector, particularly related to earnings (further details provided below).
2. Resuming Momentum
Thursday marked a positive turn for technology-related earnings, as both Amazon and Meta released favorable reports, leading to substantial stock gains after the market closed. Amazon exceeded Wall Street estimates for both earnings and revenue, attributing its success to effective cost-cutting measures that bolstered profits.
Similarly, Meta surpassed expectations across key metrics and declared its inaugural dividend payment. However, Apple, also disclosing earnings after the market closed, experienced a setback, with its stock declining by over 2% in extended trading. The decline was influenced by the company’s outlook, indicating a perceived weakness in iPhone sales.
3. Employment Landscape Update
In January, the job market experienced its most significant wave of layoffs since early the previous year, according to a recent report from outplacement firm Challenger, Gray and Christmas.
The report revealed a total of over 82,000 job cuts, marking a substantial 136% increase from December. This figure represents the second-highest number of layoffs in the dataset dating back to 2009.
Additionally, the report highlighted a minimal level of planned hiring, adding pressure to an already constrained labor market. This Friday, the Labor Department is set to release its nonfarm payrolls report, anticipated to indicate a deceleration in growth, with an expected figure of 185,000.
4. Unfavorable Market Entry
Thursday proved to be a challenging debut for Amer Sports, the Finnish manufacturer of Wilson tennis rackets and Arc’teryx outerwear, on the New York Stock Exchange.
The company opened and closed at $13.40, having priced at a discounted rate in the initial public offering. The modest gains resulted in a first-day increase of only 3%. Early indicators suggested limited sell-side interest, with only a fraction of the offered shares being traded during the debut.
This could be attributed to indifference either toward Amer itself or the generally restrained enthusiasm in the broader initial public offering market.
5. Sentiment on Main Street
In defiance of lingering macroeconomic challenges, small business proprietors exhibit increased optimism at the commencement of the year. As per a survey conducted by Goldman Sachs 10,000 Small Business Voices, 75% of small business owners expressed optimism regarding their financial outlook in 2024, reflecting a rise from 68% recorded a year prior.
Among the participants, 28% appraised the economy as excellent or good, with over half anticipating job creation within the current year.
The market update brings a mixed picture. Stocks are recovering, especially in tech, with Amazon and Meta doing well. However, job cuts surged to 82,000 in January, impacting the job market. Small businesses are optimistic despite economic challenges. Amer Sports had a tough debut on the stock exchange, reflecting general caution in the IPO market.