Market Update
- Payroll data much better than expected, despite WH hedging
- S&P around unchanged but 8/11 sectors higher
- Energy, Staples leading; Financials, Comm Services, Discretionary lagging
- Yields jump on jobs numbers but off their highs
- Check out some of the recent ICE Data/Content:
- Inside The ICE House
- Podcast History Series - The Pneumatic Tube Network That Connected the NYSE
- ETF Central: Goldman Sachs Asset Management Chief Transformation Officer Bryon Lake
- February 2026 ICE Mortgage Monitor Report: Early-January Rate Decline Unlocks Refinance Opportunity for Nearly 5 Million Homeowners
- Market Story Lines
MAC Desk Commentary:
Yesterday’s trading session was mixed. Following a disappointing retail sales number Treasuries rallied and added to Monday’s gains. which were on the back of Kevin Hassett’s comments suggesting labor market data would be weak in the coming months. That pushed yields lower, including the 2yr back to ~3.45%, the bottom-end of its range since October. The rotational activity in equities continued with the S&P 500 ending down 0.3% while the equal weight was up a similar amount. Yield-oriented sectors rallied closing up >1% with the pullback in yields, which also helped the housing related stocks. Materials also outperformed with chemical companies leading the way. Outside of mega-cap tech, financials underperformed after brokers/wealth managers became the most recent group hit with the rolling AI disruption concerns as Altruist launched a new tax planning offering within its AI platform. Financial data analytics companies also moved lower after disappointing S&P Global earnings.
Equity futures were slightly higher ahead of this morning’s labor data while Treasury yields were a touch lower. Fair to say Hassett didn’t get a sneak peak before he talked down expectations, or someone gave him the wrong report, like orange futures in Trading Places. The headline nonfarm payroll number was hot, coming in well ahead of expectations, up 130k versus a 70k expectation and last month’s 48k. Private payrolls were up 172k while government jobs fell 42k.
Of course beneath the headlines were puts and takes. Over two-thirds of the private jobs added were in healthcare and social assistance. While this group has been a consistent source of job growth (and important), it’s not a blazing signal for robust economic activity. Construction (+33k) and manufacturing (+5k) additions, however, are more bellwethers and both improved after being negative last month. In addition, the Manufacturing Diffusion Index (% of sub-industries with gains minus % with losses) moved back above 50 (overall job growth) for the first time since February 2024. The overall Private Diffusion index has been >50 for 3 straight months. Government jobs fell 42k (Federal -34k). The unemployment rate fell to 4.3% from 4.4% and the labor force participation rate ticked up to 62.5%. Wage growth was a little stronger than expected. The household survey was also quite strong showing the number of employed people up 528k. The report included the final benchmark revisions, which followed the preliminary revisions in September. That lowered 2025 total payroll growth from 584k to 181k.
Futures popped on the jobs data and the S&P opened 0.5% higher but equities didn’t last at that level for long and started to come in just after the Opening Bell. 7000 once again was a clear wall of resistance for the S&P, though it has also held its 50d ma ~6895. The index is around flat now. The equal-weight is slightly better while small caps are pressured as rates drive higher. Dow Transports are leading though airlines are weak.
Overall, 8/11 sectors are higher, with five bunched around 0.5%. Value is leading Growth. Energy is outperforming today as crude continues to climb. Staples are also up nicely with strength across the sector. Comm Services (Meta, Alphabet down 1-2%, media weak), Discretionary (Amazon -1.5%, travel weak, retailers mixed) and Financials (entire industry red except Insurance) are weighing on the index. Semis are trading well (ICE Semis +2%) and software is getting clipped again (IGV -3%) in Tech. Financial data providers and brokers continue to come under pressure from the AI-disruption concerns and select earnings reports.
Treasury yields jumped on the employment print but have come in from their highs. However, a 10y auction tailed by 1.4bp later in the day. That pushed longer yields back up a couple bp. Currently the 2y is up 4bp, 10/30y up 2-3bp. Fed expectations have repriced, with an April hold back around 75% chance after dipping to ~58% yesterday after Hassett and others talked labor sluggishness. The USD index is around unchanged after bouncing between 96.30 and 97.15.
- US 2yr +4bps to 3.51%, 5yr +3bps to 3.74%, 10yr +2bps to 4.17%, 30yr +2bps to 4.81%
- USD index: $0.00 to $96.67
Commodities are moving higher. Oil prices are up ~2% amidst reports that the administration is considering moving more assets to the Middle East and considered seizing tankers with Iranian oil. On the brighter side, the FT reported Ukraine plans elections and a peace referendum with Russia, though a Reuters report pushed back on it. Nat gas was down earlier but is now higher. Gold is up ~2%, heading back toward the day’s high after pulling back into the employment print. Silver is up ~5% also moving back toward the highs. Bitcoin is lower again and has given back about half of Friday’s ~$7k surge over the past two days. Ethereum has not been able to hold above $2K today. Intercontinental Exchange, the parent company of the NYSE, announced it would launch futures contracts based on 7 CoinDesk Indices including the CoinDesk 5 & 20 (>$40B of AUM tracking them). Robinhood is down >10% following earnings last night, which included a steep decline in crypto volumes as prices tumbled. Ag is mixed as yesterday’s WASDE report is digested (pun intended) by the market.
In addition to Robinhood, some other prominent earnings results today included Vertiv (+20%), which reported stellar results on the back of exploding demand for data center cooling and power equipment. Generac is up similarly despite results missing as guidance was strong and Data Center demand was robust. Industrial vehicle and equipment maker Terex is up >10% on earnings and strong guidance. We mentioned above that software company Dassault Systems got hit on disappointing results.
Earnings:
- Pre-Market: AVTR, BWA, GFS, GNRC, HLT, HUM, KHC, LAD, MLM, NTES, PAG, SHOP, SN, Siemens Energy, TEX, THC, TMUS, U, VRT, WAB
- After-Market: AEE, ALB, APP, AR, CRK, CFLT, CSCO, CXT, CW, DAR, EQIX, FSLY, HUBS, IFF, INSP, LEG, MCD, NBR, PAYC, QTWO, ROL, TYL, WTS
- Pre-Market (Thrs): AEP, AMG, BAX, BIRK, BN, CBRE, CNDT, CNR, CROX, ETR, EXC, FMCC, H, HWM, IRM, KIM, LECO, LNC, NBIS, OGN, PC, PX, QSR, SPHR, TNET, TRIP, TRU, USFD, UTZ, WST, ZTS
US:
- Mortgage Apps: -0.3% w/w prior -8.9%; 30yr Rate - 6.21%
- January Nonfarm Payrolls: 130k vs. 70k cons., prior 50k
- Unemployment Rate: 4.3% vs. 4.4% cons,. prior 4.4%
- Labor Force Participation: 62.5% prior 62.4%
- Average Workweek: 34.3 vs. 34.2 cons., prior 34.2
- Average Hourly Earnings: 0.4% / 3.7% m.m / y.y vs. 0.3% / 3.6% cons., prior 0.3% / 3.8%
- Oil Inventories: 8.53M vs prior -3.455M
- 10yr Auction: Tailed 1.4bp @ 4.177%
- 2:00 Monthly Treasury Budget
- Fed Speakers: Bowman, Logan (AMC)
- China CPI: 0.2% / 0.2% m.m / y.y vs. 0.3% / 0.4% cons. prior 0.2% / 0.8%
- China PPI: -1.4% y.y vs. -1.5% cons, prior -1.9%
- China Vehicle Sales: -3.2% y.y prior -6.2%
