Tech Slide Deepens As Yields Rise, ADP Impresses, Bitcoin Steadies
MarketPulse | Jan 05, 2022 01:24PM ET
After a robust private payrolls report sent Treasury yields higher, tech stocks remained under pressure. Equity traders are still betting on a strong US economy, and that has them rotating out of big-tech and embracing cyclicals. The first half of the year will be all about a strong US growth outlook that should benefit cyclical stocks, but a sustained pullback with tech stocks is not justified given the Fed hasn’t officially started their interest rate hiking cycle.
ADP crushes consensus
ADP’s private payroll report shows the labor market remains super tight and compliments the latest JOLTS report, Homebase small business employment data, jobless claims, and ISM employment index. The upcoming nonfarm payrolls report could come in much better than the 424,000 forecast, and if it doesn’t, traders will just expect the following month to make up for the miss.
ADP Chief Economist Richardson noted:
“Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth… private sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels.”
Some traders are shrugging off the strong report as the data for this report does not include much of the Omicron impact. The Omicron impact could have a bigger impact with the January nonfarm payroll report, but regardless, the labor market recovery should pick up by the Fed’s live policy meeting in March.
Bitcoin
Bitcoin is slightly higher as it is bouncing off key support that has been in place since last month. Bitcoin is in desperate need of a catalyst as crypto traders struggle to buy ahead of the beginning of a Fed rate hiking cycle. The cryptoverse remains long-term bullish with bitcoin and Ethereum, but the short-term downward move might not be over. Bitcoin has key support at the $45,000.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.