The S&P 500 index and the tech-heavy Nasdaq 100 are both up significantly since the start of the year with the S&P 500 up 8% and the Nasdaq up 16%.[0] Analysts have argued that markets have been too optimistic given the weak fourth quarter corporate results, but investors remain hopeful that moderating inflation could mean an end to the Federal Reserve’s interest rate hikes is on the horizon.[0]
On Thursday pre-market trading, the Dow Jones Industrial Average (DJIA) saw a 0.7% increase in futures, while the S&P 500 index experienced a 0.8% rise in futures, and the Nasdaq-100 futures rose 1.2%.[1] Thursday morning saw the yield on the benchmark 10-year U.S. Treasury note decline to 3.59%, and the 2-year note surpass the longer-dated note, resulting in the deepest inversion since the 1980s.[2] On Thursday, the dollar index dropped against the euro, with a rate of $102.85.[3]
On Thursday, the Labor Department announced that the amount of Americans filing for new unemployment claims increased to 196,000 for the week ending February 4th, exceeding the expected total of 190,000 according to economists. For the week ending March 30th, initial jobless claims totaled 196,000, representing a rise from the prior week’s 183,000 and surpassing analysts’ expectation of 190,000. This was the first surge in claims in six weeks.
This week, the Bureau of Labor Statistics reported that the U.S. economy added 517k jobs in January, which was a much higher number than the anticipated 185k. This was a surprisingly positive report considering the ongoing corporate layoff announcements that have been occurring in recent weeks.[4] Skeptics pointed out the sizable seasonal adjustment and yearly population changes, yet the unadjusted drop of 2.51M was the most powerful January since 1995, when compared to the 2.81M decrease in January 2022.[5] In the most recent NFP report, there was an expansion of job opportunities in various fields, particularly within leisure and hospitality, professional and business services, and healthcare.[5] Data from ADP earlier in the week was lower than what was expected, but private payrolls still increased by 106,000 in January.[5] ADP reported that, significantly, large businesses with more than 500 employees created 128,000 jobs during the month, while small businesses with fewer than 50 employees saw a decrease of 75,000 jobs.[5]
0. “Investors pile into market rally as economic slowdown risk ebbs” Financial Times, 5 Feb. 2023, https://www.ft.com/content/53b883de-decf-4d84-bb5e-661bb855b1fd
1. “Stock Market News Today: Tech Leads Again as Stocks Open in the Green” TipRanks, 9 Feb. 2023, https://www.tipranks.com/news/stock-market-news-today-futures-rise-on-strong-earnings
2. “Nasdaq, S&P, Dow futures rally ahead of jobless claims” Seeking Alpha, 9 Feb. 2023, https://seekingalpha.com/news/3934080-nasdaq-sp500-dow-jones-stock-market
3. “Stock market news live updates: Tech leads as Nasdaq, stock futures rise” AOL, 9 Feb. 2023, https://www.aol.com/stock-market-news-live-updates-123928460.html
4. “The Stock Market Is Rallying. Will It Last?” msnNOW, 8 Feb. 2023, https://www.msn.com/en-us/money/markets/the-stock-market-is-rallying-will-it-last/ar-AA17fyqW
5. “Fed Blinks, Finally” Seeking Alpha, 5 Feb. 2023, https://seekingalpha.com/article/4575404-fed-blinks-finally