The futures were lower Monday, as we get set to kick off trading after a wild ride last week that saw some big moves up and down. All the major indexes finished lower on Friday, after being up for most of the day. The big story, along with the excellent and the disappointing earnings reports from big tech, was that the economy added a stunning 517,000 jobs in January. Analysts had expected 180,000. Also, the unemployment rate dropped to 3.4%, the lowest since 1969.
Job growth is good, but with far more jobs open than potential job seekers, wage inflation will now be a component that the Federal Reserve watches closely. It will also clear the path for the Fed to hike by 25 basis points in March and May. It likely will pause then, and the 5.25% federal funds rate likely stays in place until next year.
Yields surged across the Treasury curve on Friday, after the huge jobs numbers, as sellers were eager to collect profits after a sizable rally in government paper. The 10-year note closed up 14 basis points at 3.53%. With the two-year paper surging higher by almost 20 basis points to close at 4.29%, the wide inversion between the two suggests a recession is on the way.
Brent and West Texas Intermediate crude both ended the day lower, closing out yet another down week for the benchmarks. Concerns over rising inventories and analysts tapping the brakes on China demand drove prices lower. Natural gas also finished the day lower, as once again it appears that Europe has dodged a shortage after an unseasonably warm start to winter.
Gold plunged as interest rates shot higher, after the stunning jobs data catapulted yields higher. The precious metal closed 3.5% lower for the week, the biggest weekly decline since last October. Note that the bullion has had a big run, so profit-taking was also part of the equation. Bitcoin closed down Friday, to top off an otherwise very solid week for the cryptocurrency.
24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top analyst upgrades, downgrades and initiations seen on Monday, February 6, 2023.
Bill.com Inc. (NASDAQ: BILL): SMBC Nikko downgraded the stock to Neutral from Outperform and cut its $140 price target to $110. The consensus target is $138.23, and the stock closed down 3% on Friday at $108.11.
Boeing Co. (NYSE: BA): RBC Capital Markets lowered its Outperform rating to Sector Perform with a $225 target price. The consensus target is $221.57, and Friday’s closing share price was $206.01.
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