Here are the most important news, trends and analysis that investors need to start their trading day:
Dow futures decline due to Friday’s jobs report uncertainty
Economists fear January nonfarm payrolls could actually decline
Amazon surges after strong cloud-led earnings, plans to hike Prime prices
Snap soars over 45% on much better-than-expected profit
Ford sinks after earnings, revenue miss on supply chain issues
1. Dow futures decline due to Friday’s jobs report uncertainty
Dow futures fell 100 points Friday as investors await the government’s before-the-bell release of its monthly employment report. The 10-year Treasury yield ticked lower but was still above 1.8% ahead of the jobs data, which many economists fear could show big losses in nonfarm payrolls for the first time since late 2020.
Nasdaq futures rose Friday, boosted by Amazon‘s more than 12% premarket surge on strong cloud-led earnings after the bell Thursday. Snap rocketed more than 45% higher in the premarket, the morning after delivering better-than-expected quarterly results and rosy forward guidance.
The Nasdaq on Thursday sank 3.7%, slammed by Meta Platforms‘ over 26% plunge on weak earnings. The Facebook parent’s more than $230 billion market cap loss was the largest one-day value decline in Wall Street history.
The S&P 500 and the Dow Jones Industrial Average on Thursday slid 2.4% and 1.4%, respectively. Despite those losses, the Nasdaq and S&P 500 were still on track for their strongest weekly performance of 2022. The Dow was also tracking for a weekly gain as of Thursday’s close.
2. Economists fear January nonfarm payrolls could actually decline
The sudden jolt to the economy from the Covid omicron variant could show up in January’s employment report. Economists have wide-ranging expectations for the release, which is expected Friday at 8:30 a.m. ET. The consensus Dow Jones estimate calls for a 150,000 gain in nonfarm payrolls. However, many economists — such as those at PNC, Jefferies, Morgan Stanley, Goldman Sachs and Wilmington Trust — expect sharp declines.
In addition to the jobs numbers, the Federal Reserve is monitoring signs of inflationary pressures such as U.S. oil prices extending gains above $90 per barrel to October 2014 highs. The Fed is expected to hike interest rates multiple times this year, starting in March, to combat rising inflation.
3. Amazon surges after strong cloud-led earnings, plans to hike Prime prices
Amazon’s strong fourth quarter was carried entirely by its cloud business. In fact, North America and International e-commerce operations actually delivered losses. Amazon also reported a gain of almost $12 billion from its investment in electric vehicle marker Rivian Automotive. A Refinitiv analysis stripping out one-time items put adjusted earnings at $5.80 per share compared with estimates for $3.57. Revenue of $137.4 billion in Q4 slightly missed expectations. Amazon guided lower for first-quarter earnings and revenue.
The company also hiked the price of its Prime membership for the first time in four years. The annual cost will increase to $139 from $119. Monthly it’ll go to $14.99 from $12.99. The price changes will go into effect for new members on Feb. 18, and for current members after March 25.
4. Snap soars over 45% on much better-than-expected profit
Snap‘s fourth-quarter adjusted earnings more than doubled estimates. Revenue and user growth also exceeded expectations. The Snapchat parent also issued an upbeat outlook. While saying it’s making progress adjusting to Apple’s new privacy policies that affect ad tracking, Snap has to contend with similar headwinds as Meta, which warned the Apple changes would result in a $10 billion revenue hit this year. On the post-earnings call, Snap’s CFO said, “It will take at least a couple more quarters for our advertising partners to build full confidence in our new measurement solutions.”
5. Ford sinks after earnings, revenue miss on supply chain issues
Shares of Ford, which have soared roughly 78% in the past 12 months, were tracking for an over 5% drop at Friday’s open. The automaker’s adjusted fourth-quarter earnings were well below estimates, while revenue also missed expectations. Ford’s stake in Rivian pumped up full-year net income. While hitting its annual earnings guidance for 2021, Ford fell short of production target estimates due to supply chain problems, including an ongoing shortage of semiconductor chips, the company’s CFO said on the post-earnings call. The company released solid guidance for 2022.