Coffee With Greta: Strong Jobs Report Crushes Rate Cut Hopes

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DJIA Futures: -138 (-0.4%)

SPX Futures: +1 (+0.02%)

NASDAQ Futures: +50 (+0.3%)

Good morning friends!

Futures are mixed as traders digest the strong jobs report and big tech earnings. 

Let’s get right to it!

Jobs Report Crushes Expectations

The U.S. economy added far more jobs than expected in January. 

The Labor Department reported employers added 353,000 jobs last month vs 185,000 expected. 

The unemployment rate was unchanged at 3.7% vs expectations for an increase to 3.8%. 

Average hourly earnings increased 0.6% monthly and 4.5% year over year. 

That was far better than economists’ expectations for 0.3% monthly and 4.1% annually. 

Professional and business services led the job gains adding 74,000 workers. 

Health care added 70,000, retail trade added 45,000, government added 36,000, social assistance added 30,000, and manufacturing added 23,000.

December’s job gains were also revised higher to 333,000 from the 216,000 initial estimate. 

November was revised up to 182,000 from 173,000.

The strong labor market data sent Treasury yields shooting higher this morning. 

The 10-year yield is up 13 basis points at 4% while the 2-year yield is up 19 basis points at 4.40%. 

CME Group’s FedWatch Tool now shows over 80% of traders betting the Fed will keep rates unchanged at the March 20 meeting. 

Amazon Rallies On Strong Earnings

Amazon (AMZN) shares are rallying 6.4% ahead of the open after crushing Q4 expectations and issuing strong guidance. 

Here’s how the tech giant’s results compared to analysts’ estimates: 

  • EPS: $1.00 vs $0.80 expected
  • Revenue: $170 billion vs $166.2 billion expected
  • Amazon Web Services Revenue: $24.2 billion as expected
  • Ad Revenue: $14.7 billion vs $14.2 billion expected

Revenue surged 14% year over year thanks to a strong holiday shopping season and Amazon’s October Prime Day event. 

CEO Andy Jassy said, “This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon. As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about.”

Amazon forecast Q1 sales between $138 billion and $143.5 billion vs $142.1 billion expected. 

That would represent growth of 8% to 13%. 

Apple Falls On Weak iPhone Outlook

Apple (AAPL) shares are down 3.7% in premarket trade after beating fiscal Q1 estimates but forecasting weaker iPhone sales. 

Here’s how the iPhone maker’s results compared to analysts’ estimates: 

  • EPS: $2.18 vs $2.10 expected
  • Revenue: $119.58 billion vs $117.91 billion expected
  • iPhone revenue: $69.70 billion vs $67.82 billion expected 
  • Mac revenue: $7.78 billion vs $7.73 billion expected 
  • iPad revenue: $7.02 billion vs $7.33 billion expected 
  • Other Products revenue: $11.95 billion vs $11.56 billion expected 
  • Services revenue: $23.12 billion vs $23.35 billion expected 

The company did not provide official guidance for the current quarter but the CFO said both total company revenue and iPhone sales would be similar to the same quarter last year. 

Meta Surges On Earnings Beat, Dividend Announcement

Meta Platforms (META) shares are surging 16.5% ahead of the open after crushing Q4 expectations and announcing the company’s first-ever dividend. 

Here’s how the Facebook parent company’s results compared to analysts’ estimates: 

  • EPS: $5.33 vs $4.96 expected
  • Revenue: $40.11 billion vs $39.18 billion expected

Revenue jumped 25% year over year, the fastest rate of growth since mid-2021. 

Net income more than tripled from a year ago. 

Meta’s “year of efficiency” appears to have paid off in 2023 as the company doubled its operating margin to 41% while expenses decreased 8% year over year. 

The company announced it will pay investors a $0.50 per share dividend on March 26. 

Meta also announced a $50 billion share buyback. 

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