Alphabet results sends tech stocks higher, ADP impacted by omicron, bitcoin wall at USD 40k

Investors are focusing on what has been a mostly positive earnings season, also shrugging off a negative private payroll report that was clearly impacted by the omicron variant spread in January. Google crushed earnings and that optimism has many traders feeling that the bottom is in for the mega-cap tech giants.  Apple and Google have made Wall Street turn more optimistic about earnings season and that is largely because some of these tech giants are still delivering impressive results despite ongoing supply chain issues.  With almost four out of five companies delivering in-line or better results this earnings season, traders who were looking to sell into rallies are starting to doubt that trade.

Google’s earnings soar

Alphabet’s earnings get an A+ after posting strong advertising revenue growth, record net income profit, impressive Google Cloud revenue, surging interest with YouTube shorts and as the company explores innovation with blockchain.

The 20-for-1 stock split has some traders excited because that could mean Alphabet might be making a run to be a part of the Dow Jones Industrial Average.

ADP

The writing was on the wall for the labor market recovery to hit a major speedbump in January.  The White House reminded us earlier this week that Omicron led to nearly 9 million people calling out sick in January, which probably means hiring activity struggled.  Financial markets did not react significantly to the first negative private payroll reading since December 2020 as the ADP blamed the unexpected temporary loss of jobs to the Omicron variant. A lackluster labor situation in January has been the message the Biden administration has been getting out, so investors have shifted their focus ahead to next week’s inflation report which should show Americans are still battling surging prices.  Another 7% inflation reading will continue to pressure the Fed into a harder, better, faster, and stronger first-rate hike.

Bitcoin

It was too soon for bitcoin to make an attempt at the USD 40,000 level.  Bitcoin looks like it’s going to bounce around from the mid-USD 30,000s to USD 40,000 over the next week.  Bitcoin will continue to take a cue from what is happening on Wall Street and right now it looks like next week’s inflation report could be the main event.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya