ECONOMIC SILUET: 5 things to know before the stock market opens Friday

Jumat, 03 Februari 2023

5 things to know before the stock market opens Friday

FRI, FEB 03, 2023

MORNING SQUAWK

1. Tech letdown

Meta raised everyone's hopes with its refreshing talk of efficiency Wednesday, but the Facebook parent ultimately set markets up for a bummer after the bell Thursday. Major tech companies Apple, Alphabet and Amazon all reported earnings, and all disappointed in some way, sending their shares down in off-hours trading. Apple posted its biggest year-over-year quarterly revenue decline since Barack Obama was president. Google parent Alphabet suffered from a decline in ad spending at YouTube. And Amazon offered soft guidance as it wrapped up its slowest year of growth as a publicly traded company. Stock futures were in the red before the open Friday, especially at the tech-heavy Nasdaq. Read live markets updates.

2. Here comes the jobs report

The January jobs report hits at 8:30 a.m. ET. Economists are expecting a slowdown – 187,000 jobs added vs. 223,000 in December – as well as slight growth in the unemployment rate and an easing in wage increases. Yet, as CNBC's Patti Domm points out, economists aren't certain about what kind of impact the wave of tech layoffs will have on the January number. Markets could react positively if the count comes in lower than expected, particularly after Federal Reserve Chairman Jerome Powell this week acknowledged "disinflationary" factors in the economy and offered slightly more dovish commentary on rate hikes. "The market is so desperate to find in anything a reason that the Fed is going to pivot," said Jefferies economist Tom Simons.

3. Blue Oval Blues

Tech companies weren't the only ones to have a rough time with earnings Thursday. Ford posted an uglier than expected fourth quarter that saddled it with a net loss for the year. The company blamed "execution issues" and supply chain problems that left it 100,000 units short of its expected sales, translating into about $1 billion in missed earnings. Ford CEO Jim Farley vented his frustration to CNBC's Phil LeBeau, saying that he knows the company is under pressure to turn things around quickly. He also asked for a little grace from investors: "Be patient. You know, we got the right team. We got the right plan. We're growing like heck in our pro and EV business."

4. China Covid surge saps Starbucks' sales

Coronavirus cases surged in China after the government relaxed its zero Covid policy, which in turn led to more pressure on businesses. Starbucks on Thursday said transactions at cafes in China, its second largest market, fell by nearly 30% year-over-year in the most recent quarter. The company still stuck with its full-year guidance, despite the downbeat results from China. And Starbucks also expects things to turn around in the country during the second half of its fiscal year after negative same-store sales growth persists through the fiscal second quarter.

5. Suspected Chinese spy balloon spotted

American officials said Thursday they were monitoring what they suspected to be a Chinese spy balloon floating over the northern part of the United States. China has sent spy balloons over the U.S. before, but not usually for this long, officials told NBC News. The revelation about the balloon came days before Secretary of State Antony Blinken was set to meet with Chinese President Xi Jinping. China, meanwhile, called for calm as it looked into the situation. U.S. defense officials said the device's intelligence-gathering ability was limited, and so far they have opted against shooting it down out of concerns that debris could hurt people and damage property on the ground.

— CNBC's Mike Calia wrote this newsletter. Jesse Pound, Patti Domm, Michael Wayland, Phil LeBeau and Amelia Lucas contributed.

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