The end of
the week was full of surprises. But the major one was Facebook’s (Meta) Q4 2021
corporate report as shares of the social media giant plunged 26% just after the
publication. This was the biggest one-day drop in the history of the world’s
largest social network. The market cap of Facebook dropped by $237 billion in a
single day, a disastrous slide that scared investors to death--- U.S. tech
sector stocks followed Mark Zuckerberg brainchild and dragged the Nasdaq 100
and S&P 500 broad market indexes down by 4.2% and 2.4% respectively.
Futures on
major U.S. stock indices recovered on Friday morning after the publication of
much better-than-expected Amazon and Snap Q4 earnings reports, but they then
returned to their Thursday dips just before the opening of the U.S. market. And
we may expect another negative day during Friday’s trading session.
The first
Non-Farm Payrolls report for the year published this Friday had a consensus of 150,000 new jobs and unemployment
of 3.9%. But ADP presented an alternative scenario on Wednesday with a sharp
decline in Non-Farm Payrolls by 301,000, the largest since May 2020. The real
official picture was suddenly much more optimistic as January Non-Farm Payrolls
was at 467,000, which is a much higher number than anybody expected. While this
is the case, unemployment went slightly up to reach 4.0% which keeps it within the
appropriate low level..
Would it be
enough for investors to lower their expectations towards the Federal Reserve’s
(Fed) monetary tightening angle? It is hard to justify an answer. Technically, the
S&P 500 index remains on the positive upside. The nearest support level is
at 4510 points. The index may find solid ground at this level to resume the
rally and main target at 4650-4700 points. At least at this level there are
more upside signals to hold buy positions.
Brent crude
prices claimed its upside “$100” scenario as they jumped almost to $93 per
barrel. The technical picture suggests Brent crude prices may hit $94.00-95.00
next week. A more aggressive approach points out that Brent
crude must close this week above $94.60 per barrel. In this case prices may
reach $97.00-100.00 next week.
However,
crude prices are seen to be extremely high for current global economic
situation and the global demand for crude. But it is too risky to play against
current speculations in the market. It is better to wait or carefully join the
speculative rally.
Gold prices
continue to swing around the $1800 per troy ounce landmark. The nearest support
level is still at $1750 per ounce. But for the next two months gold prices are
likely to remain on the upside track within the $1800-1840 trading range. Thus,
no solid trades could be opened at the moment.
The EURUSD pair
changed its track to the sharp upside after the European Central Bank (ECB) signaled
to a more hawkish monetary policy following in the Fed’s footsteps. The Euro
rose above 1.14700 to the U.S. Dollar almost hitting the target for entire
month of February at 1.15500. So, any buy trades are already overdue, while it
is too early to open sell positions given the upward trend in EURUSD.
GBPUSD has
changed its pattern to the upside and has already met it targets above 1.36000.
The move was supported by the Bank of England (BoE) that raised its interest
rates from 0.25 to 0.5%. The BoE raised its interest rates for the second time
in two months. Nevertheless, the Pound seems to be overbought from a technical
perspective. So, any buy trades are not looking as attractive, while sell
position are likely to be avoided as the Cable continues to move in the upward
direction.