Market Volatility on Meta and Maybe Now, Jobs

Last week, markets turned wildly on economic news, as investors tried to interpret signals from the Fed on inflation and interest rates. This week, corporate earnings dominate and things look to be more stable – for a while.

Volatility is back, in a big way. Meta pull down the market yesterday after an earnings report was revealed some signs of trouble. Its drop removed more than $230 billion from market capitalization, the largest single-day loss, in dollars, in history.

But after the bell, Amazon bumper income reportand the market turned sharply in after-hours trading, with Amazon at one point up nearly 20%. (Because sustained scores, which means Meta’s Mark Zuckerberg lost $29 billion in net worth while Amazon’s Jeff Bezos made $20 billion.) Pull down Meta’s also turned around after reporting better-than-expected earnings: Snap’s stock jumped more than 50% in after-hours trading.

The market is flat today, but the jobs report could shake things up again. For now, futures contracts show a mild opening, but attention has turned back to the economy. This morning, the government will report the number of jobs that employers added in January, and like all other late signs, it will be messy. Forecasts from economists range from a 250,000 job gain to a loss of 400,000, an unusually wide range. “It’s going to be a hot mess,” said Skanda Amarnath of the Employ America research group.

  • The Omicron coronavirus wave spiked in mid-January, just as the government was gathering data for the report, but so far there is little evidence that the wave caused lasting economic damage.

  • The unemployment rate could fall even as hiring slows, because a spike in Covid cases could cause some people to pause their job search. The government only considers someone unemployed if they are actively looking for work.

  • Anyway, the first month of the year is often difficult to measure. Employers drop workers on vacation, and the ups and downs of the pandemic can mess with normal seasonal adjustments.

What will it all mean for the Fed’s planned rate hikes? Maybe not much, said Vincent Reinhart, chief economist at Dreyfus and Mellon, formerly of the Fed. That said, if the incoming payrolls numbers are weaker than expected, it could reduce the likelihood of the central bank raising rates by a half point, rather than the expected quarter, in March. Market Volatility on Meta and Maybe Now, Jobs

Fry Electronics Team

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