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Nasdaq 100 Futures Rebound on Amazon Earnings, APAC to Open Mixed

Nasdaq 100 Futures Rebound on Amazon Earnings, APAC to Open Mixed

Margaret Yang, CFA, Strategist

Nasdaq 100, Hang Seng Index, ASX 200 INDEX OUTLOOK:

  • Dow Jones, S&P 500 and Nasdaq 100 indexes closed -1.45%, -2.44% and -4.22% respectively
  • Amazon surged 14% during after-hour trade as it posted record sales despite rising costs
  • Asia-Pacific markets look set to open mixed amid uneven US earnings. Traders eye tonight’s NFP report

Amazon Earnings, Hong Kong Reopen, US Jobless Claims, Asia-Pacific at Open:

Wall Street equities tumbled on Thursday as Facebook wiped out a quarter of its market value following a dismal Q4 earnings report. Meanwhile, Amazon – the last FAANG company to report results – has posted a big earnings beat, and its share price popped 14% during after-hours trade. US equity futures rebounded as a result, setting a mixed tone for Asia-Pacific markets at the open.

Amazon’s earnings per share (EPS) came in at $5.80, far exceeding analysts’ forecasts of $3.57. The company also registered a $12 billion gain from its investment in electric vehicle company Rivian. Its Q4 revenue hit a record of $137.4 billion, reflecting a strong holiday shopping season amid Covid-related stimulus. Another bright spot is its advertisement business, which grew 32% YoY to $9.7 billion during the quarter. The company gave a lower-than-expected revenue target of $112-117 billion for the first quarter, but investors appear to remain confident about its outlook. Amazon’s diversified business model may help it to navigate future challenges including rising labor costs and supply chain issues.

All of the five FAANG companies, alongside Tesla, have reported their Q4 results. Netflix and Facebook have largely disappointed investors with lower-than-expected forward guidance and user growth, whereas Tesla, Apple, Google and Amazon have delivered stellar results. A divergent earnings picture underscores a challenging environment for tech giants to maintain growth momentum amid rising costs and the gradual exit from the pandemic. Demand for digital devices, goods and electric vehicles remains robust though.

Top 10 Stocks by Market Cap in the Nasdaq 100 Index 03-02-2022

Nasdaq 100 Futures Rebound on Amazon Earnings, APAC to Open Mixed

Source: Bloomberg, DailyFX

Meanwhile, weekly initial US jobless claims data came in at 238k, compared to a 245k estimate. A lower-than-expected print underscores tight labor market conditions, putting today’s nonfarm payrolls report in the spotlight.

Market participants have forecasted a 150k increase in January’s nonfarm payrolls, but some agencies predicted an as much as 400k decline. Earlier, the ADP report shows that the private sector slashed 301k jobs last month due to rising Covid-19 cases and a wider slowdown in business conditions. If the nonfarm payrolls report ends up with a big miss, it may alleviate concerns surrounding the Fed’s policytightening and lead the US Dollar lower.

US Weekly Jobless Claims

Nasdaq 100 Futures Rebound on Amazon Earnings, APAC to Open Mixed

Source: Bloomberg, DailyFX

Asia-Pacific markets look set to open mixed on Friday following a volatile session on Wall Street.The Hong Kong market will reopen today after the Lunar New Year holiday. Mainland bourses remain closed and will open next Monday. Futures in Japan, Singapore, Malaysia and Thailand are in the red, whereas those in Australia, Hong Kong, South Korea, Taiwan, India and Indonesia are in the green.

Looking ahead, the USnonfarm payrolls report dominate the economic docket alongside Canadian unemployment rate. Find out more from the DailyFX calendar.

Nasdaq 100 Index Technical Analysis

The Nasdaq 100 index reversed lower after bouncing from a key support level of 14,180. An immediate support level can be found at 14,500 – the 78.6% Fibonacci extension. Failing to hold above this level may lead to a re-test of 14,180 for support. The MACD indicator is trending lower beneath the neutral midpoint, suggesting that near-term momentum remains weak.

Nasdaq 100– Daily Chart

Nasdaq 100 Futures Rebound on Amazon Earnings, APAC to Open Mixed

Chart created with TradingView

Hang Seng Index Technical Analysis:

The Hang Seng Index (HSI) has likely broken a “Falling Wedge” pattern from the upside, as highlighted in the chart below. Prices have since pulled back to test the upper trendline for support. Holding above this level may pave the way for a bullish trend reversal with an eye on 24,900 for resistance. Next support level can be found at 22,800. The MACD indicator formed a bearish crossover, suggesting that bearish momentum may be dominating.

Hang Seng Index – Daily Chart

Nasdaq 100 Futures Rebound on Amazon Earnings, APAC to Open Mixed

Chart created with TradingView

ASX 200 Index Technical Analysis:

The ASX 200 index breached below the floor of a range-bound zone between 7,200 to 7,500, exposing the next support level of 6,920 – the 61.8% Fibonacci extension. Prices are attempting for a technical rebound this week with an eye on 7,080 for resistance. The MACD indicator is about to form a bullish crossover, suggesting that selling pressure may be ebbing.

ASX 200 Index – Daily Chart

Nasdaq 100 Futures Rebound on Amazon Earnings, APAC to Open Mixed

Chart created with TradingView

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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