Stock Rally Blunted After Hours, Private Payrolls See Big Miss

Tech earnings halt 4-day equities rally after the close  Some fan favorites put an end to the recent stock rally with poor earnings. Meta Platforms (the parent of Facebook) dropped more than 20% after the close on missing virtually (pun intended) every analyst estimate. The Nasdaq has rallied nearly 8% since last Thursday after starting the year down ~16%. Rates rallied across a flattening curve as private payrolls saw a drop of 300K jobs in January primarily due to the spread of omicron.

Private payroll data has a big miss in January on the omicron effect. ADP data showed that private payrolls decreased 300K in January while analysts were expected an increase of 180K. Although the print is ugly, most view the report as a temporary hindrance. On Friday, the Labor Department will release its January jobs report with analysts expecting a jobs increase of 150K.

Euro-Zone inflation increased more than expected in January  Inflation in Europe increased 5.1% year-over-year in January coming in higher than analyst estimates of 4.4%. Traders are now pricing in a 10 bps rate hike in July, up from September with the inflation uptick. Rising energy costs were the main culprit for the increase as core inflation was down (excludes energy and food) in January to 2.3% year-over-year down from 2.6% in December.