All eyes on the US jobs report

All Eyes on the US Jobs Report – Stocks increased ahead of Friday’s crucial U.S. jobs report, concluding a volatile week in which mixed earnings from major tech companies placed the market on the defensive. Oil prices also rose amid renewed tensions in the Middle East.

Shares of Amazon.com Inc. and Intel Corp. surged in premarket trading after optimistic earnings results, while Apple Inc. saw a decline following reports of weaker demand in China. Futures for the S&P 500 edged higher, but the index was on track for its worst weekly performance in over a year. This decline reflects concerns about the outlook for artificial intelligence (AI) and cloud computing, particularly following results from Microsoft Corp. and Meta Platforms Inc.

Apple raises concerns about revenue growth

Apple Inc. is entering its most crucial sales period of the year amidst growing concerns about revenue growth and ongoing challenges in the highly competitive Chinese market. Following the company’s quarterly earnings report, Apple announced that total sales for the December period are expected to rise by a percentage in the low-to-middle single digits, which fell short of analysts’ projections of a 7% increase. Additionally, the company reported a decline in revenue from China last quarter, again missing estimates.

Overall, Apple is striving to recover from one of the longest sales slumps in its history. Revenue had declined for four consecutive quarters in fiscal 2023 before showing solid improvement in the past two quarters. Although Apple remains the most valuable company in the world, it is facing a sluggish smartphone market, increased competition in China, and regulatory scrutiny across the globe.

US jobs report in focus

Today’s payroll report may indicate a slowdown in job growth, especially after an inflation measure favored by the Federal Reserve posted its largest monthly increase since April. This uncertainty complicates the outlook ahead of next week’s Federal Reserve policy meeting, with the swaps market now pricing in 20 basis points of easing, down from 24 at the beginning of the week.

DXY still hovering around 104.0

The US Dollar Index fell to a low of 103.80 but later recovered, reaching a high of 104.15 earlier today, just before the US jobs report was released. The technical indicators remain close to overbought territory, maintaining a bearish outlook for the time being.

Today’s jobs report could serve as a catalyst for further declines, especially if the data indicates a significant slowdown or a higher unemployment rate. If that occurs, the index may retrace to yesterday’s low. Conversely, if the report is unexpectedly strong, it could prompt another upward movement towards 104.50, with a chance of breaking through that resistance level.

Gold below $2750

After recently rising to nearly $2,790 a few days ago, Gold experienced a sharp decline during yesterday’s trading, dropping to as low as $2,732. This move has caused technical indicators to decrease from the overbought territory. Although Gold attempted to recover earlier today, it still remained below $2,760.

Additionally, if it closes the week below $2,750, it will create a weekly reversal candle on the chart, potentially signaling the start of a deeper retracement that could target $2,700 once again. The downside bias remains strong as long as gold does not reach a new record high above $2,788 for the time being.

Oil recovering

Oil prices continued to rise after Axios reported that Iran is planning a significant retaliatory strike on Israel using the militias it supports in Iraq. West Texas Intermediate (WTI) crude traded above $71 per barrel, while Brent crude approached $75.

Despite the escalating tensions in the Middle East, technical indicators are gradually improving, which could lead to additional gains later next week. If Brent stabilizes above $75, the next resistance levels to watch will be $75.60, followed by $76.00.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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