U.S. stock futures red on hot jobs number, disappointing tech-titan earnings

Reuters

U.S. stock futures red on hot jobs number, disappointing tech-titan earnings

Feb 3, 2023 at 12:05 pm GMT

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U.S. equity index futures decline: Nasdaq 100 off ~2%

U.S. Jan non-farm payrolls 517k vs 185k estimate

Euro STOXX 600 index off ~0.4%

Dollar, crude up; gold, bitcoin decline

U.S. 10-Year Treasury yield jumps to ~3.49%

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U.S. STOCK FUTURES RED ON HOT JOBS NUMBER, DISAPPOINTING TECH-TITAN EARNINGS (0900 EST/1400 GMT)

U.S. equity index futures are under pressure in the wake of the release of the latest data on U.S. employment.

The January non-farm payroll headline jobs number came in at 517k well above the 185k estimate. The unemployment rate was 3.4% vs a 3.6% estimate. Of note, wage data, on a month-over-month basis was in-line with the Reuters Poll, and slightly above the estimate on a year-over-year basis:

According to the CME's FedWatch Tool FEDWTACH, the probability of a 25 basis point rate hike at the March FOMC meeting has now risen to around 95% from 83% just before the numbers were released. There is now around a 5% chance that the Fed sits on its hands in March from around 17% just before the data came out.

CME e-mini Nasdaq 100 futures NQcv1 are leading U.S. equity index futures lower, sliding around 2%. In the wake of disappointing tech-titan earnings reports, the futures were down around 0.8% just before the numbers came out.

Nearly all of the 11 S&P 500 sector SPDR ETFs are quoted down in premarket trade, with FANG groups such as consumer discretionary .SPLRCD, communication services XLC.P and tech XLK.P taking the biggest hits. Energy XLE.P is rising slightly, while staples XLP.P are around flat.

Regarding the jobs data, Quincy Krosby, chief global strategist, at LPL Financial said, "Certainly it's way above the consensus estimate. This is not what the market wants to see, nor is it what the Fed wants to see at this stage."

Krosby added, "This is kind of report that you want to see when coming out of a recession to signal strength in the economy, not when the futures market is looking at the Fed finishing its rate hike cycle."

Here is a premarket snapshot:

(Terence Gabriel, Caroline Valetkevitch)

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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)

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