Earnings Season | The Daily Peel | 2/7/22

Jobs — Clearly, Americans love to work, as evidenced by the latest employment report released on Friday. Just as clear from this report is the fact that economists still have no idea what they’re talking about. But despite the super solid numbers, it’s tough to please Wall Street. Let’s see what happened.

In January, the U.S. economy added 467,000 non-farm payroll jobs. “Experts” embarrassingly had their estimates pegged at 150,000 and spent the days leading up to the release warning Wall Street that the January numbers would be weak and anomalous on account of the latest C19 variant ripping across the nation all month. But it turns out no one cared, and businesses hired over 3x what was expected. That’s a beat if I’ve ever seen one.

As has been the case seemingly forever, leisure and hospitality jobs led the overall job growth. But the most striking part of the report came from revisions to the numbers reported for the previous two months, adding over 709,000 jobs in total to the November and December reports. 

As a cherry on top, wage gains also came in hot. Workers earned 0.7% more in January than in December, and annual wage growth lept 5.7%. So yay, we’re earning more money! Psyche. This is little more than further confirmation that inflation is gaining speed. Real earnings are still down year-over-year after that damn 7% CPI print from December. 

But still, things in the labor market are going well. Payrolls spiked, wages grew, the employment participation rate is right on the cusp of February 2020 figures, and unemployment sits at 4%. Despite that, Wall Street had mixed feelings. That’s because strong job growth gives permission to the Fed to raise rates more aggressively. 

In the balance between full employment and low inflation, better-than-expected jobs numbers permit the Fed to focus more on taming inflation. And how do they do that? Yup, rate hikes, which are just about as spooky as it gets for stocks.

Of course, digestion comes with time, and Mr. Market is a certified crazy person. Who knows what the popular opinion will be at open today, but things may become a bit more clear this week as we have a lot of data to look forward to.

The Week Ahead — Earnings season is always fun. Although we’re past the peak, the fun won’t stop just yet — let’s see what’s in store this week.

Today, we’ll get earnings from industry giants and buzzy growth stocks alike. Tyson Foods and On Semiconductors kick things off pre-market while Amgen, Chegg, and Take-Two Interactive close the day after the bell.

Tuesday, we’ll get an update on the meltdown over at Peloton after the bell, along with reports from Chipotle and Spirit Airlines. Before the bell, however, pandemic legend Pfizer takes the stage.

Wednesday will be the most fun day of the week. Giants like Disney and Uber report after markets close, while the likes of CVS Health and Canopy Growth kick things off in the AM. But the real fun will come at 8:30 am when every single eyeball on Wall Street turns to the January CPI report, expected to clock in at 7.2%.

On Thursday, in addition to your Instagram feed blowing up with cringy “Almost Friday” posts, we get to see the numbers from Coke, Pepsi, and PG&E before open. Finishing the day will be Zillow, Twitter, Aurora Cannabis, Affirm, and Cloudflare, all reporting after the bell.

And as we head into the weekend and those “Almost Friday” posts become “Friday Beers” posts, we get plenty more earnings too. All before the bell, highlights include Under Armour, Dominion Energy, and Enbridge alongside a bunch of rando stocks.

It’s gonna be a rocky week, apes. We’ll see you there.

Oh, lympics — Did anyone else have literally zero idea that the Olympics are happening right now? C’mon, I can’t be the only one, right?

Well, they are. The 2022 Winter games have been running in Beijing since Feb. 4th and will wrap up shop on Feb. 20th. The games this year, however, are literally like no other. No massive crowds, no obscenely well-done opening ceremony like in 2008, and really no excitement at all. 

Subtracting from the hype are COVID and the flurry of “diplomatic boycotts” due to controversies from human rights abuses of China’s Uyghur population to morally-ambiguous participants in the torch-carrying ceremony.

Still, the show must go on. NBC announced it has plans to attempt to f*ck up much less than they did for the Tokyo games. The studio does have exclusive rights to the games through 2032, a big boon for parent company Comcast, so maybe they’ll figure out how to stream it right by then. 

Oh yeah, and there’s seven new events at these games, most of which are not actually new events at all but just include both men and women. They include:

• Women’s Monobob (what a name)
• Men & Women’s Big Air Skiing
• Mixed Team Relay in Speedskating
• Mixed Team Ski Jumping
• Mixed Team Snowboard Cross
• Freestyle Skiing Mixed Team Aerials

Happy watching, apes.