The Labor Department employment report showed nonfarm payrolls increased by 467,000 jobs last month. Data for December was revised higher to show 510,000 jobs created instead of the previously reported 199,000.

This is much higher than what economists surveyed by The Wall Street Journal expected. They believed 150,000 new jobs would have been created in January. The ADP private employment survey published a few days earlier reported 301,000 business job losses last month.

But although job creation was much stronger than expected, the unemployment rate rose slightly. As for hourly wages, they continued to rise by 0.7% over the month and by 5.7% over a year. The markets saw this as confirmation that the Fed would have to act vigorously on rates. The January employment figures in the United States are one of the key elements of the equation that the Fed is trying to solve. 

Futures contracts were slightly down on Friday before the release of U.S. employment figures, and picked up after the release, before going down again. Markets are still volatile. Oil continues to soar with a minimized spread between Brent and WTI.

Yesterday's session on Wall Street was marked by the plunge of Meta Platforms, whose financial performance was overshadowed by a disappointing guidance. Last night, however, Amazon reminded investors that American tech is still on top of things. Between these mixed signals, equity markets are not sure where to go.

Yesterday, the Nasdaq suffered a rare -4.22% at the close. Meta Platforms (ex-Facebook) dropped by 26%, signing the largest capitalization carnage in history in a single session, about $200 billion evaporated. To get an idea, this represents the GDP of New Zealand, and lowered Mark Zuckerberg's estimated fortune from $113 billion to $85 billion.

In other news, the monetary policy decisions of the Bank of England (a rate hike) and the ECB (nothing) were quite conventional. However, investors were surprised by ECB head Christine Lagarde's hawkish speech. She talked about "risks to the inflation outlook being on the upside". Above all, it implies that, like the Fed, the ECB is afraid/aware of being "behind the curve", i.e. behind in the fight against rising prices. To top it all off, Lagarde refused to confirm that there will be no rate hike this year, which is a somewhat unexpected about-face.

 

Economic highlights of the day:

Only one major event today, the US employment data for January.

The dollar is trading at EUR 0.8725. The ounce of gold is up to USD 1813, while oil is stronger than ever, with Brent at USD 92.70 and WTI at USD 91.97. The yield on 10-year US debt recovered several points yesterday to 1.85%. Bitcoin is holding steady at USD 37,578.

 

On markets:

* Amazon - The U.S. online retail giant reported a better-than-expected quarterly profit on Thursday and announced an increase in subscription rates for its Prime service in the U.S. to offset increases in delivery costs and wages. The group's stock jumped 13% in pre-market trading.

* Ford Motor - The automaker reported Thursday a quarterly profit below analysts' expectations and said it expects its vehicle production to recover more slowly this year than that of rival General Motors.

* Activision Blizzard, which is in the process of being acquired by Microsoft, reported lower-than-consensus quarterly adjusted revenue on Thursday, due in part to lower sales of the game "Call of Duty" amid the lifting of health restrictions.

* Snap - The social network announced Thursday that its advertising business had recovered faster than expected from privacy rule changes imposed by Apple. The group also provided guidance for the current quarter that beat analysts' expectations. Snap shares soar 48% in pre-market trading, heading for its best daily performance since its 2017 IPO.

* Pinterest - The image-sharing site on Thursday reported its first-ever annual net profit on the back of a surge in advertising revenue that helped the group beat Wall Street expectations in the fourth quarter. The stock jumped 15.4% in pre-market trading, heading for its best daily performance in 15 months.

* Meta Platforms - The U.K. Competition and Markets Authority (CMA) announced Friday that it has fined Facebook's parent company 1.5 million pounds for failures related to the takeover of Giphy, an animated image platform.

* General Electric - EDF's board of directors is expected to approve on Monday the purchase of the nuclear activities of the American group General Electric, writes French daily Les Echos on Friday, noting that the public group should pay 273 million euros for this operation.

* Nike - The U.S. sports equipment manufacturer announced Thursday to sue StockX, an online trading platform accused of using the Nike brand, without authorization, to market virtual sneakers in the form of digital assets called non-fungible tokens (NFT).

* French drugmaker Valneva and its U.S. partner Pfizer on Friday announced positive new Phase 2 data for their lyme disease vaccine candidate.

* Novavax - The company announced Thursday that it has received the green light from the New Zealand Health Authority for Nuvaxovid, its COVID-19 vaccine for adults.

 

Analyst recommendations:

  • Advanced Micro Devices: UBS adjusts price target to $150 from $115, maintains neutral rating
  • Alphabet A: Phillip Securities raised the recommendation on Alphabet Inc. Class A to buy from accumulate. PT up 22% to $3,493.
  • Amazon.com: Goldman Sachs retains his positive opinion on the stock with a Buy rating. No major update to the target price set at USD 4100 compared to USD 4200.
  • Bango: Berenberg starts coverage with a Buy rating, targeting GBp 300.
  • C.H. Robinson Worldwide: Morgan Stanley lowers price target to $62 from $65, maintains underweight rating
  • Exelon: Goldman Sachs downgrades to neutral from buy. PT inches up 0.5% to $44.
  • Ferrari: Bestinver Securities downgrades to hold from buy. PT up 4.8% to $240.53.
  • Lazard: Keefe, Bruyette & Woods downgrade to market perform from outperform. PT up 15% to $49
  • Meta Platforms: DZ Bank AG cut the recommendation on Meta Platforms Class A to sell from hold. PT down 5.4% to $225.
  • NVR: UBS upgrades to neutral from sell, adjusts price target to $5,500 from $4,825
  • Old Dominion Freight Line: Goldman Sachs raises price target to $343 from $337, maintains neutral rating
  • Penn National: Loop Capital Markets upgrades to hold from sell. PT up 8.1% to $49.
  • Pinterest: Susquehanna lowers price target to $32 from $50, maintains neutral rating
  • Pultegroup: UBS upgrades to buy from neutral, adjusts price target to $70 from $63
  • Ralph Lauren: Truist Securities raised the target on Ralph Lauren Corp. Class A to $156 from $141. Maintains buy rating.
  • Spotify: Benchmark adjusts price target to $260 from $300, maintains buy rating
  • The Clorox Company: Atlantic Equities cut the recommendation to underweight from neutral. PT down 29% to $118.
  • US Bancorp: JPMorgan lowers price target to $72 from $73, maintains overweight rating
  • Walmart: Wolfe Research raises price target to $170 from $169, maintains outperform rating
  • Wells Fargo: JPMorgan lifts price target to $58.50 from $57, maintains neutral rating