As new cases of the variant come in from around the country, the market now appears willing to shrug off some of the uncertainty. Therefore, we will not turn our attention to the monthly Employment  Situation number that expect a solid number according to several reports.  If so, it should inspire the bulls to continue the relief rally.  However, if the hype misses expectations, the bears might find inspiration.  Whatever occurs, it will be interesting to see if there is a willingness to hold positions through the weekend due to the uncertainty.

Asian markets struggled for direction overnight, trading mixed with modest gains and losses though seemed to celebrate the delisting of Didi in the United States.  This morning European markets edge higher as investors closely monitor economic data and news on the new variant.  With jobs numbers just around the corner and a light day of earnings, U.S. futures have rallied off of overnight lows, currently suggesting a flat open.  However, the results of the employment number could change things quickly and dramatically before trading begins.  So, buckle up for move volatility!

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have a light day with just 12 companies listed on the calendar, and several of them are unconfirmed.  Notable reports include BIG, GCO, & HIBB.

News and Technicals’

Minnesota, Colorado, New York, and Hawaii confirmed new cases of the omicron variant on Thursday.  New York City Health Commissioner Dr. Dave Chokshi said the Empire State cases indicate community spread of the variant. In addition, the first U.S. case of the virus was confirmed in California on Wednesday.  The House and Senate passed a bill to prevent a government shutdown.  The president plans to sign the measure before the end of Friday and prevent a lapse in federal funding. The legislation will keep the government running through Feb. 18.  Shares of Didi soared as much as 14% in U.S. premarket trading Friday.  Didi says it plans to delist from the New York Stock Exchange “immediately.”  The Chinese ride-hailing firm plans to pursue a listing in Hong Kong instead.  Tesla Chief Executive Elon Musk has sold another 934,091 shares of the electric vehicle maker worth $1.01 billion to meet his tax obligations related to the exercise of options to buy 2.1 million shares, and regulatory filings showed on Thursday.  Following a flurry of options exercise, Musk still has an option to buy about 10 million more shares at $6.24 each, which expires in August next year.  Treasury yields pulled back slightly in early Friday trading, with the 10-year dipping to 1.4444% and the 30-year trading at 1.7644%.

Yesterday was a nice relief rally that avoided the emotional swings even as more confirmed cases of the new variant across the country. So now we turn our attention to the monthly Employment Situation number, which many expect to come in with solid results.  With the uncertainty of the government shutdown kicked down the road until the 18^th of February, a good employment number may set the stage for more relief rallies.  However, if the highly anticipated number misses expectations, look out for more price volatility.  If we do rally today, it will be interesting to see if the bullishness will hold as we slide into the weekend.  With the new variant’s high volatility and considerable uncertainty, willingness to hold risk through the weekend could bring on a wave of profit-taking into the close.

Trade Wisley,

Doug