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The Employment Situation report was released on Friday and was weaker than expected; the economy added about half the jobs that were forecasted. The Omicron variant and the recent trend of self-employment as part of the Great Resignation could be to blame for the smaller number. However, the unemployment rate fell to 3.9% from 4.1% which was aided in part by an increase in the participation rate. Equity index futures drifted a little lower on the news.
Acuity Brands (NYSE:AYI) rose more than 4% in premarket trading after reporting that the company beat earnings and revenue estimates. The electronics company saw strength in its lighting and lighting controls sales despite supply chain challenges.
Of course, not all stocks are rising; Starbucks (NASDAQ:SBUX) fell 2% in premarket trading after being downgraded by RBC Capital and Oppenheimer. The analysts cited near-term growth concerns.
Bitcoin continues its slide Friday morning, dropping another 3.21%. The cryptocurrency is down more than 11% in the last five days and nearly 38% from its November 2021 high.
Market Discounting
The “votes” from buyers and sellers create an important process called price discovery. Price discovery often comes with increased volatility because there’s a lot of participants with a lot of money and a lot of strong opinions. Investors who are willing to watch these changes may find opportunities arising.
What we see here is the S&P 500 and the Dow will likely have bearish pressure, while the Nasdaq could have bullish pressure. This will likely result in market volatility. Additionally, because the Nasdaq has already shown greater weakness, it may actually break support if the S&P 500 and the Dow do swing lower.
Alternating Currents: While there’s almost always a company or two announcing earnings from week to week, the unofficial earnings season starts next week. Earnings can help provide the needed information investors are seeking when determining what to buy and what to sell. It’s a deluge of information that the markets have to discount.
Earnings season starts with major financial companies and banks. This could be very interesting because we’ve already seen financial stocks move quite a bit on rising yields.
TD Ameritrade® commentary for educational purposes only. Member SIPC.
This post contains sponsored advertising content. The content that follows is for informational purposes only and is not intended to be investing advice.
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