Volatile Week Ends With Weakness


Joseph Rangel

Feb 03rd 2023  .  3 min read

Volatile Week Ends With Weakness

After multiple Tech giants reported earnings after hours on Thursday, an adverse reaction caused a market-wide downturn. Apple (AAPL), Amazon (AMZN), and Google (GOOGL)pulled the market lower after hours, leading into the pre-market of today’s session.

Non-farm Payroll Fuels Market

Before the opening bell, Nonfarm Payroll (NFP) shocked the market by reporting an enormous beat on the median forecast. The expected release number was 187,000, and data revealed an astonishing 517,00. The colossal number now brings unemployment to its lowest point since 1969. A report of this magnitude would support seeing a soft landing rather than the anticipated recession. 

As the opening bell sounded, an immediate influx of buyers flooded the market, sending all indexes higher rapidly. Notably, the Nasdaq was able to claw back overnight losses quickly. There was an impressive recovery across the market, but heavy resistance around the 4,200 level on the S&P 500 futures ultimately sent the market lower. 

The rest of the cash session was spent showing signals of weakness as the indices raced back toward the low of the day. For the remaining couple hours of the trading session, the market consolidated at lows while the market closed.

With the Nasdaq continuing to lead the downside, heavily weighted stocks in the Technology sector will play a pivotal role in the market movement next week.

Key Things To Watch In the Market Next Week

Apple is one name that held firm during the market-wide selloff to the end of the week. Looking into next week, using Apple as a compass can help gauge strength in the market and the Nasdaq. Apple is such a heavily weighted stock that it would be hard for the market to go lower without AAPL following along continuously. Conversely, if AAPL starts to roll, the market can see an accelerated downside move. 

Next week is relatively light on the Economic data side of the market, so expect digestion of this week’s events to happen over this weekend and then a free reign next week. The only notable events to occur next week are the weekly Initial and Continuing Jobless claim on Thursday and the University of Michigan (Umich) Consumer Sentiment Index data on Friday.

Some significant levels in the S&P 500 futures to keep an eye on next week include the psychological levels of 4,100 and 4,200. Each of these levels saw a substantial reaction at them. 4,100 saw excellent support, and 4,200 stopped the rally in its tracks. Heading into next week, a break of either of these levels can cause the next leg in the market to trigger.

The market faces Adversity, Closes Negatively.

The Nasdaq and the S&P 500 were negative to close the session. The S&P 500 futures closed down 1.06%, losing 44 points, while the Nasdaq futures closed down 1.74%, declining 224 points. The Dow Jones futures followed, closing down 0.40%, decreasing 135 points.