Week Ahead: Still Warm CPI Data May Impact Frequency of Rate Hikes; Topping Bitcoin?

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  • Market volatility could continue on unclear Fed policy path
  • Treasury yields rise, potentially confirming future rate

Friday’s release – which showed the US economy added 467,000 new jobs in January – shocked analysts who had expected a negative figure for the first month of 2022 when Omicron cases spiked. Additionally, payroll revisions for November and December showed an additional 709,000 jobs were added retroactively in the final two months of 2021. Additionally, Friday’s data showed a jump of 5.7% in year-over-year in January.

The unexpected and, for some, astonishing jobs data suggests that inflation remains high. As such, investors will be looking for confirmation of next week’s print, which is scheduled for Thursday. Another set of data that could be relevant amid the fastest escalation in inflation in four decades is consumer sentiment; this coming Friday will also be closely watched.

Still, rising inflation, even offset by better-than-expected economic data, proved puzzling for investors. After Fed Chairman Jerome Powell’s hawkish financial policy tilt early last month that rate hikes were coming, investors began selling stocks, leading to the worst decline. for years for stocks in January.

Even with Fed officials backtracking last week in an effort to calm markets, stocks have remained . Adding to the potentially mercurial mood of the week ahead, earnings season continues with key companies such as drugmakers (NYSE:) and Amgen (NASDAQ:) reporting as Omicron continues to proliferate. Additionally, consumer staples giants Coca-Cola (NYSE:), PepsiCo (NASDAQ:) and Kellogg (NYSE:) report results; all, or at least some, of these firms likely to benefit from the cyclical rotation that remains at work.

The climbed 0.52% on Friday, after gaining 1.55% for the week.

The broad benchmark is likely forming an ascending, bearish flag after the previous strong selloff. We also predict that the flag, once formed, will have created the right shoulder of an H&S top. However, this reversal pattern is only complete on a downward breakout of her cleavage.

Economically sensitive sectors were the leaders last week. outperformed, jumping almost 5% over the week, followed by +3.56% over the same period; shares followed directly behind, up 3.54%.

The sector’s biggest weekly lag was , down 1.58%, after shares of Meta Platforms (NASDAQ:) plunged 26% on Thursday. The social media giant, owner of Facebook, Instagram and WhatsApp, has disappointed, even as most SPX companies have so far met or exceeded expectations.

Additionally, Facebook’s total user base fell for the first time since the launch of the social media platform. Adding to investor discontent, the Menlo Park, Calif.-based tech giant warned that growth will slow in the next quarter due to Apple (NASDAQ:) allowing its users to disable tracking on its devices. , hampering Meta’s ability to provide appropriate targeting to advertisers. It is estimated that this could cost Bfrs 10 billion per year.

FB Weekly TTM

FB Weekly TTM

The stock may find support at the 200 WMA. Even it could just form the right side of an H&S top.

Meanwhile, Treasuries are signaling higher rates ahead. The yield on the benchmark note rose above 1.900% on Friday, for the first time since July 2019.

UST 10 years per day

UST 10 years per day

Yields have broken out of the small symmetrical triangle we are watching, having formed a much larger symmetrical triangle, suggesting higher yields in the near term.

Last week, the dive.

Daily Dollar

Daily Dollar

However, it found support on Friday from the bottom of an uptrend channel.

rose slightly but may trade in a bearish pattern.

Daily Gold

The yellow metal rose inside what could turn out to be an ascending channel, after a three-day sell-off. The fall of gold would coincide with a rise of the dollar.

jumped on Thursday, back above $40,000.

BTC/USD Daily

The cryptocurrency is testing the top of a bullish, bearish channel after the previous sharp decline which was the downside breakout of an earlier bearish flag, itself the downside penetration of an H&S top. The implicit objective of the H&S suggests a much larger double top. This implied target could take the digital token to multi-year lows.

extended its rise for a seventh week by gaining 2.2%, ending the week at $91.95.

The week ahead

All times listed are EST

Monday

2:00 a.m.: Germany – : is expected to rise 0.4% vs. -0.2%.

Tuesday

8:30 a.m.: United States – : seen collapsing to -83.00B from -80.20B previously.

Wednesday

10:30 a.m.: United States – : is expected to show a build of 1.525M from the previous drawdown of -1.046M.

Thusday

8:30 a.m.: United States – : should decline slightly to 0.5% vs. 0.6% MoM.

8:30 a.m.: United States – : to print lower, at 228K after last week’s 238K reading.

3:15 p.m.: United Kingdom –

Friday

2:00 a.m.: United Kingdom – : remain stable at 1.1% Q/Q.

2:00 a.m.: United Kingdom – : fall to 0.2% against 1.1% MoM.

5:30 a.m.: Russia – : should go from 8.50% to 9.50%.

10:00 a.m.: United States –

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