Meta, Amazon surge; markets await NFP impact

What's going on with Meta and Apple

In a resounding endorsement of the tech industry's resilience over the past 16 months, the Nasdaq and S&P 500 futures experienced a notable surge following the release of stellar earnings reports by Meta and Amazon. This tech rally set the tone for a positive outlook, with Asian stocks mostly on the rise.

Meta, the parent company of Facebook, witnessed a remarkable 15% surge in after-hours trading as its outlook surpassed expectations. Notably, the company revealed plans for an additional $50 billion in share buybacks and announced its inaugural dividend scheduled for March. Amazon, too, joined the celebration, reporting robust sales and beating profit outlook estimates.

The combined effect of Meta and Amazon's stellar performances translated into a staggering $270 billion increase in their market capitalization during after-hours trading. This not only demonstrated the companies' financial prowess but also validated the strategic measures adopted across the tech industry during the challenging economic climate of the past 16 months.

However, amidst the general euphoria, Apple stood as an outlier, experiencing a 3% dip in stock value. Concerns arose following weaker-than-expected revenue from China, prompting speculation about the vulnerability of this crucial market.

In other market developments, Intel faced a setback as it slipped in after-hours trading. The Wall Street Journal reported a delay in the construction of a $20 billion chip facility planned for Ohio. This delay was attributed to market challenges and a slow disbursement of government grant money. Originally slated for production to commence in 2025, the facility is now not expected to be completed until late 2026.

NFP to conclude eventful week

Looking ahead, today's eagerly awaited US Non-Farm Payroll (NFP) report is poised to be the focal point, concluding a week marked by significant market events. Anticipations center around a moderation in headline job growth to 178,000 in January, compared to the robust 216,000 in December. Additionally, a slight increase in the unemployment rate to 3.8% from 3.7% is expected, while the pace of average hourly earnings growth is projected to decelerate to 0.3% month-on-month.

Preliminary indicators, such as the ADP private employment figure, revealing a modest growth of 107,000, and a slight dip in the ISM manufacturing employment component to 47.1, hint at potential softness in headline job growth. Yet, the wildcard remains in wage growth, with the capacity to significantly influence market dynamics.

A key post-NFP development to monitor is the 10-year yield, which witnessed a marked decline throughout the week. The strong downside momentum now amplifies the likelihood of the overarching downward trend from the peak of 4.997 resuming, adding another layer of intrigue to an already eventful week in global financial markets.