Here are the most important news, trends and analysis that investors need to start their trading day:
- Dow futures decline, bond yields rise after strong jobs report
- January nonfarm payrolls surge way past expectations
- Amazon surges after strong cloud-led earnings, plans to hike Prime prices
- Snap soars over 40% on much better-than-expected profit
- Ford sinks after earnings, revenue miss on supply chain issues
Dow futures fell nearly 200 points and the 10-year Treasury yield rose to 1.9% after Friday's jobs report showed strong gains last month. Nasdaq futures rose early Friday, boosted by Amazon's 11% premarket surge on strong cloud-led earnings after the bell Thursday. But Nasdaq futures went negative after the jobs data. Snap rocketed more than 40% 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.
The U.S. economy created 467,000 jobs in January, the Labor Department reported Friday. That was much better than estimates for a 150,000 nonfarm payrolls gain. Expectations were all over the place coming into the print on worries the spike in Covid cases due to the raging omicron variant could jolt the data. In fact, many economists — such as those at PNC, Jefferies, Morgan Stanley and Goldman Sachs — had expected sharp declines in jobs last month. That clearly didn't happen. The U.S. unemployment rate ticked up to 4% in January, slightly higher than estimates.
- 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.
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.
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."
Shares of Ford, which have soared roughly 78% in the past 12 months, were tracking for an over 7% 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.