Stocks Mixed Ahead of Jobs Report, Tech’s Lag Continues, Bitcoin Dip Deepens—and What Else Is Happening in the Stock Market Today

Overseas, London’s FTSE 100 rose 0.1% as British traders tread water ahead of the U.S. data release, and Hong Kong’s Hang Seng Index surged 1.8% amid optimism among investors that China would prioritize a stable economy.

After a bumpy week in the market that has hit tech stocks the hardest, all eyes will be on Friday’s U.S. jobs report, which includes the key nonfarm payrolls figure. 

Pressure on tech has been linked largely to signals of a strong U.S. economy and indications that the Federal Reserve is turning more hawkish. This includes signals from meeting minutes of the Federal Reserve’s monetary policy group—the Federal Open Market Committee (FOMC)—that the central bank is heading for earlier, faster rate increases and eventual quantitative tightening.

“The Fed is rapidly catching up to the tightness in the labor market that has been clear in most of the data for many months now outside of the actual headline payroll data,” said Jim Reid, a strategist at Deutsche Bank .  

“For now the consequences of Wednesday’s FOMC minutes continue to reverberate in markets, as Fed officials across the dove-hawk spectrum emphasized support for starting quantitative tightening shortly after rate hikes,” Reid added.

Economic and monetary policy indicators have also led to a rise in Treasury yields; the yield on the benchmark 10-year note was near 1.73% Friday, having started the week at 1.53%. Higher bond yields tend to discount the present value of future cash flows, hurting high-growth tech stocks with valuations that rely on the prospect of profits years into the future.

A strong jobs report would feed into the narrative that the Fed will tighten conditions sooner, while a print far below expectations could see bond yields ease and more risk sentiment return to the market, helping tech. Expectations are for around 422,000 jobs to have been added in December.

“We are likely to need a number lower than 250k, or higher than 550k, to drive a Fed risk-on, or risk-off, move to finish the week,” said Jeffrey Halley, an analyst at broker Oanda.

Michael Hewson, an analyst at broker CMC Markets, said that “today’s number is a difficult call.” 

“It ought to be a good number given that continuing claims have fallen back to the levels they were prepandemic at around 1.7 million in recent weeks, while the employment component in the manufacturing ISM this week was decent,” he added.

In commodities, crude prices continued to rise as threats to production from unrest in Libya and Kazakhstan supported supply fears. Futures contracts for international oil benchmark Brent were up 1% to near $83 a barrel, with U.S. futures for West Texas Intermediate crude similarly up to near $80.50. Brent started the week around $78.

“Oil’s price action is bullish, as it shrugged off a series of seemingly bearish news inputs over the last 48 hours. That news swung the other way overnight, with domestic protests disrupting local production,” noted Halley.

Cryptocurrencies continued to lag behind, furthering losses from a slump this week. Bitcoin, the leading digital asset, was down 1.5% to below $42,500, according to data from CoinDesk, having started the week around $47,000. Smaller peer Ether fell near 4%, remaining above $3,200, declining from above $3,800 Monday.

Here are three stocks on the move Friday:

STMicroelectronics (ticker: STM) was up 4.5% in the U.S. premarket after the chip group released preliminary quarterly revenues of $3.6 billion, ahead of expectations of $3.4 billion.

Royal Dutch Shell (RDS.A) was down 0.5% in the premarket, but was trading higher in London. The company said its share buyback program would continue “at pace” this year, distributing cash from the sale of assets in the Permian Basin last year, and that higher gas prices had boosted its trading business.

GameStop (GME) shot up 19% in the premarket as the company’s plans to expand into digital assets were taking shape. The retailer is making a division for cryptocurrency partnerships, while building an NFT marketplace, Barron’s reported.

Write to Jack Denton at [email protected]