Daily Brief - February's Job Data Unveiled

TLDR: Is the labor market heating up or cooling down? Let's dive into the heart of today's Nonfarm Payrolls data.

While the US economy churned out a stunning 275,000 nonfarm payroll jobs, overshooting economists' forecasts by a hefty margin, the accompanying rise in the unemployment rate to 3.9% and revisions to January's figures paint a picture of complexity beneath the surface.

While the bulk addition of 275,000 jobs points to enduring economic resilience, the adjustments to prior months and the slight increase in unemployment could hint at underlying volatility.

Furthermore, Wall Street had its eyes glued to the finer details, with the average hourly earnings showing a modest month-on-month increase of 0.1%, a slowdown from the anticipated 0.2%. Year-on-year earnings held steady, aligning with expectations at 4.3%, but this figure, alongside the average weekly hours worked, offers a nuanced glimpse into the labor market's health.

As the Fed weighs its options, the dialogue around future interest rate cuts intensifies. With some betting on rate cuts as soon as June, the unfolding labor market story will be critical for investors and policymakers alike.

Market Movers: If 10Y yields remain low:

Here are the historically best and worst performing sectors when 10Y yields are below 4.1%:

The top 3 performing sectors:

1. Information Technology, with an average 1-month return of 1.86%
2. Consumer Discretionary, with an average 1-month return of 1.32%
3. Health Care, with an average 1-month return of 1.13%

The bottom 3 performing sectors:

1. Utilities, with an average 1-month return of 0.81%
2. Consumer Staples, with an average 1-month return of 0.78%
3. Materials, with an average 1-month return of 0.63%

Asset Spotlight: Alphabet C price drop

In the last 8 occasions where Alphabet C's price dropped, Toggle's analysis showed a median upward trend in the price of the stock over the subsequent 3 months.

Alphabet has acknowledged issues with the Gemini AI tool, noting that some of its text and image responses were "biased" and "completely unacceptable," and has paused the use of its tool for creating images. Efforts are underway to address these issues, with plans to relaunch Gemini AI in the coming weeks.

Earnings Update: Oracle reports on Monday

For the upcoming earnings report, the company is anticipated to report earnings of $1.37 per share, which would represent a year-over-year increase of 12.3%.

Given the competitive nature of the cloud computing market, investors should look closely at the performance of Oracle's cloud business. Growth in this segment can be a strong indicator of Oracle's competitive positioning and future revenue potential.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.