New York and Shanghai Stocks: Focus on Alphabet, Amazon and Other Big Tech Earnings

This week, the New York stock market is expected to be driven by the January jobs report and earnings from AI-related big tech companies such as Alphabet and Amazon.com.

First, the U.S. Department of Labor will release the January jobs report on the 6th. The market expects the unemployment rate to come in at 4.4%, unchanged from the previous month. Nonfarm payrolls are seen rising by 67,000 from the prior month. The Institute for Supply Management (ISM)’s January manufacturing and services purchasing managers’ indices (PMI) are also seen as key indicators, to be released on the 2nd and 4th, respectively. Investors can use these data to gauge the business cycle in U.S. manufacturing and services.

Corporate earnings releases will also continue. Alphabet reports on the 4th, and Amazon on the 5th. Investor attention is expected to focus on the two companies’ AI-related capital expenditure (CAPEX) plans and profitability metrics such as revenue and operating profit. On the first trading day, the 2nd, Palantir Technologies will report results, followed by AMD on the 3rd. Jim Baird, chief investment officer (CIO) at Plante Moran Financial Advisors, said, “Companies with sharply elevated expectations are now at a point where they must prove performance,” adding, “Even if earnings grew, shares could see a pullback if the growth rate falls short of market expectations.”

Uncertainty around monetary policy is also seen as a market variable. Investors are focused on what kind of monetary policy Kevin Warsh, the Fed chair nominee, will pursue. Over the weekend, news of Warsh’s nomination lifted the U.S. dollar and Treasury yields, while prices of gold, silver and bitcoin plunged.

Chinese stocks are expected to take their cue from manufacturing and services indicators. The January Caixin manufacturing PMI and services PMI will be released on the 2nd and 4th, respectively. The market expects the manufacturing PMI to edge up to 50.3 from the prior month’s 50.1. By contrast, the services PMI is expected to slow to 51.9 from 52.0 the previous month.

By Lee Hye-in hey@hankyung.com