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Major market indices have begun a new year with a 1-2 record, following another session closing lower across the board. In yet another intraday head-fake, each index looked to be making a bid to at least fill the hole of the early morning plummet, only to turn around and nearly test session lows. The Dow came in -339 points, -1.02%, and it was the best of the bunch. The S&P 500 reached -1.16%, the Nasdaq -1.47% and the Russell 2000 -1.04%.
Amazon (AMZN - Free Report) became the latest big company to announce a sizable chunk of layoffs from its workforce: now reportedly -18K, deeper than originally expressed. This follows Salesforce (CRM - Free Report) yesterday stating that 10% of its employees would be receiving pink slips. Last month, Goldman Sachs (GS - Free Report) and Cisco Systems (CSCO - Free Report) announced coming layoffs of 8% and 5%, respectively.
This type of guidance has now become commonplace, as many analysts had been expecting for months now. They likely won’t be reflected in tomorrow morning’s nonfarm payroll report from the U.S. government, but perhaps we’ll finally start seeing that labor force erosion accumulating by the time January nonfarm payrolls are out. (Unfortunately, this will occur two days after the Fed most likely raises interest rates another 50 bps.)
But if you’re looking for bad new in the market today, you need not look far: Bed, Bath and Beyond , in perhaps the mother of all guidance warnings, today announced it is running short of cash and may consider declaring bankruptcy. Shares fell nearly another -30% today on this news, now roughly -94% from its late March highs, when Bed, Bath got caught up in “meme fever.” And Silvergate Capital , based on its close association with now-defunct FTX, lost -40% today.
Based on other data we’ve seen of late, we do not expect a major downturn in nonfarm payrolls Friday morning. If anything, we may be seeing some upside pressure from the 200K currently expected. This is down from the previous month’s 263K, which was also stronger than expected. Average hourly earnings last time around went up +0.6%, and ADP’s (ADP - Free Report) Wage Growth survey from this morning bears this out.
Thus, consider this recent bout with selloffs to be market participants owning up to the likely reality that 5% on the Fed funds is in the cards sooner than later. We’ll keep our powder dry speculating beyond for now, but if the labor market remains robust another month down the road, we can quite confidently expect more of the same. Get out your shopping lists; some dream stocks may be headed lower yet again.
Image: Bigstock
Bad News Rife, Markets Down Ahead of Jobs Report
Major market indices have begun a new year with a 1-2 record, following another session closing lower across the board. In yet another intraday head-fake, each index looked to be making a bid to at least fill the hole of the early morning plummet, only to turn around and nearly test session lows. The Dow came in -339 points, -1.02%, and it was the best of the bunch. The S&P 500 reached -1.16%, the Nasdaq -1.47% and the Russell 2000 -1.04%.
Amazon (AMZN - Free Report) became the latest big company to announce a sizable chunk of layoffs from its workforce: now reportedly -18K, deeper than originally expressed. This follows Salesforce (CRM - Free Report) yesterday stating that 10% of its employees would be receiving pink slips. Last month, Goldman Sachs (GS - Free Report) and Cisco Systems (CSCO - Free Report) announced coming layoffs of 8% and 5%, respectively.
This type of guidance has now become commonplace, as many analysts had been expecting for months now. They likely won’t be reflected in tomorrow morning’s nonfarm payroll report from the U.S. government, but perhaps we’ll finally start seeing that labor force erosion accumulating by the time January nonfarm payrolls are out. (Unfortunately, this will occur two days after the Fed most likely raises interest rates another 50 bps.)
But if you’re looking for bad new in the market today, you need not look far: Bed, Bath and Beyond , in perhaps the mother of all guidance warnings, today announced it is running short of cash and may consider declaring bankruptcy. Shares fell nearly another -30% today on this news, now roughly -94% from its late March highs, when Bed, Bath got caught up in “meme fever.” And Silvergate Capital , based on its close association with now-defunct FTX, lost -40% today.
Based on other data we’ve seen of late, we do not expect a major downturn in nonfarm payrolls Friday morning. If anything, we may be seeing some upside pressure from the 200K currently expected. This is down from the previous month’s 263K, which was also stronger than expected. Average hourly earnings last time around went up +0.6%, and ADP’s (ADP - Free Report) Wage Growth survey from this morning bears this out.
Thus, consider this recent bout with selloffs to be market participants owning up to the likely reality that 5% on the Fed funds is in the cards sooner than later. We’ll keep our powder dry speculating beyond for now, but if the labor market remains robust another month down the road, we can quite confidently expect more of the same. Get out your shopping lists; some dream stocks may be headed lower yet again.
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