Wall Street opened lower due to a lower-than-expected U.S. private non-payroll report and EU inflation delineations for the third straight month.
As of January 2023, the inflation rate in the Eurozone declined for the third straight month. Despite the positive inflation data, most European central banks are expected to stick to their 50 basis point interest rate hikes in the coming meetings.,
Meanwhile, in the U.S., market experts are 90% positive that the U.S. Federal Reserve will increase its banks’ interest hikes by 25 basis points by this week’s meeting. Investors are now focused on FED Chairman Jerome Powlle and the decisions made at FED meetings. Broadly speaking, experts predict that Jerome will come out and confirm that the FED officials remain committed to their tightening policy. On the other hand, January data shows lower-than-expected figures in the private non-payroll sector.
According to ADP National Employment, private nonfarm payrolls in the United States increased by 106,000 in January. The number is higher but remains relatively lower than previous forecasts.
However, the ADP report doesn’t necessarily confirm the accuracy of the non-payroll numbers for January. According to another survey conducted by Reuters economists, private non-payrolls in the United States are more likely to increase to 185,000.In January, which is lower than December’s added jobs of 225,000,
Between the disappointing private non-payroll Robert and the mixed corporate earnings, Wall Street reacted negatively to today’s market news. On average, more than 50% of the stocks failed on Wednesday premarket. Wall Street declined on Wednesday trading hours; the S&P 500 fell by 0.31 percent, the Nasdaq declined by 0.11 percent, and the Dow Jones decreased by 0.53 percent.
Today’s performance was the same as Tuesday’s mixed results. The stock market is shaken by fourth-quarter corporate earnings results.
Tech stocks continued to deliver mixed results: Apple Inc. stock sank by 1.6%, Alphabet fell by 0.51 percent, and Amazon declined by 0.4%. Still, other stocks are gaining momentum after better-than-expected earnings reports. This includes Tesla stock, which increased by up to 40%, Netflix stock, which increased by 93%, and Meta stock, which increased by 3%.
As for the commodity market, energy prices declined for the third straight month in the Eurozone. Fortunately for the European countries, winter has shown some mercy to the EU countries; otherwise, the crisis will be a catastrophe.
West Texas Intermediate fell by 3.5% to $76 per barrel, Brent oil fell by 3.45% to $82 per barrel, and natural gas prices fell by an average of $2.55 per gallon in most states in the U.S.
Technical analysis indicates that the U.S. is facing a 60% probability of a market recession. The stock market waves between gains and losses, and the other signs indicate a bear market’s end.
On top of that, if a recession arrives, it’s more likely to witness a sharp decline in the S&P 500 main index and its stocks. The complexity of the current situation is erasing any hopes of a market rebound. Higher interest rates, a mixed stock market, and corporate gains all play a crucial role in the final market direction, whether it’s a rebound or a recession.