Stocks rallied on Friday to finish the week strong after briefly losing the momentum of the January rally.
In Europe economic upgrades are boosting sentiment thanks to lower energy prices, bumper government support and the earlier-than-anticipated reopening of the Chinese economy, which is set to boost global demand.
The upgrade comes after officials and business leaders at this week’s annual World Economic Forum in Davos also embraced a more upbeat outlook, and the IMF signaled that it would soon upgrade its forecasts for global growth.
The Dow Jones Industrial Average added 1 percent, while the S&P 500 advanced 1.89 percent. Meanwhile, the Nasdaq Composite rose 2.66 percent
The Nasdaq was also the outperformer for the week, posting a 0.55 percent gain and its third positive week in a row. The Dow finished the week lower by 2.70 percent, and the S&P posted a 0.66 percent loss, both breaking two-week winning streaks.
Investors continued to monitor earnings reports and mega cap tech shares led the market higher. Netflix gained about 8.5 percent after posting more subscribers than expected even though its quarterly earnings missed analysts’ estimates. Alphabet rose more than 5 percent after the company announced it will lay off 12,000 employees. That brings total layoffs in the tech industry to more than 200,000 over the last year according to the Financial Times.
But putting this into perspective only underscores Big Tech’s breathtaking hiring spree during the pandemic. Believe it or not, most Big Tech workforces are up—way up—since the beginning of Covid.
Microsoft hired 40,000 people from June 2021 to June 2022. So after the recent layoffs, it’s still up 30,000 employees in 18 months.
Alphabet’s 12,000 layoffs represent ~33 percent of the staff it hired in the single year to September 2022.
Meta hired more than 26,000 employees in 2020 and 2021; it recently cut 11,000 jobs.
So what about Apple? The iPhone maker remains the only Big Tech company that has not yet announced layoffs. One factor suggested could be that it hired far more methodically than its peers during the pandemic. Apple increased its headcount by just 6.5 percent in the year to September 2022—about the same growth rate it’s had since 2016.
Sectors all higher in Friday trading.
Semi Cap equipment, payments and fintech, internet and software also helped the tech sector finish stronger.
Futures
The SPI futures are pointing to a 0.5 percent gain.
Currency
One Australian dollar at 8:00 AM has strengthened compared to the US dollar on Friday buying 69.67 US cents (Fri: 69.11 US cents).
Commodities
Iron ore futures are pointing to a 1.76 percent gain.
Across the Atlantic, European markets closed higher. London’s FTSE added 0.3 per cent, Frankfurt gained 0.8 per cent and Paris closed 0.6 per cent higher.
In Asian markets, Tokyo’s Nikkei added 0.6 percent, Hong Kong’s Hang Seng gained 1.8 percent and China’s Shanghai Composite closed 0.8 percent higher.
On Friday, the Australian sharemarket added 0.2 percent to close at 7,452.
