FTSE 100: Record High Tempts More Longs Into Closing Out

Indices: Jobs Beat Tempers Rate-Cut Hopes

– U.S. equity index futures edge higher after a session that saw early gains fade despite a stronger-than-expected January ; (0% to 6,941) finished flat on the day, the (+0.3% to 25,201) modestly firmer, while the (-0.1% to 50,121) snapped a three-day win streak; Treasury yields moved higher across the curve following the 130K jobs print, firmer wage data and a disappointing auction, and market pricing (CME’s FedWatch) tilted to reduce likelihoods though via majority still sees a 25bp reduction in June with the second in September

Stocks: Software Under Pressure, Big Moves for Most Reporting Earnings

– Calmer moves for shares of Nvidia (NASDAQ:) (+0.8%) but session sees big gains for (+3.4%) and more so Micron (NASDAQ:) (+10%) as latter’s CFO informed investors its ramping up production of the new HBM4 memory chips

– Software stocks exposed to AI under pressure again: ServiceNow (NYSE:) (-5.5%), SAP (-4.5%), Datadog (-1.8%), Adobe (NASDAQ:) (-2.8%), Salesforce (NYSE:) (-4.4%)

– Moderna (NASDAQ:) (-3.5%) closed lower after FDA refused to review its experimental flu shot

– Shares of Gilead Sciences rebounded +5.8% after initial guidance miss, supported by optimism around new HIV treatment potential

– Meme stock movers: Beyond Meat (-5.5%), Kohl’s (+8.5%), GoPro (-10.3%), Krispy Kreme (-1.3%), Opendoor (+1.5%), AMC (-5.6%), Nokia (+3.7%), GameStop (-2.5%)

– Crypto stocks track cryptocurrencies lower: Coinbase (-5.7%), MicroStrategy (-5.2%), Mara Holdings (-1.3%), Gemini Space Station (-8.4%), Bullish (-0.6%)

– Earnings:

o Cisco Systems (NASDAQ:): Beat on earnings and revenue with guidance roughly in line with estimates; shares plummet 7.6% in extended trading

o Applovin (NASDAQ:): Strong results, but shares slipped as growth concerns remain in mobile ad tech and competitive pressure continues; shares drop 6% in extended trading

o McDonald’s (NYSE:): Earnings and revenue beat expectations, helped by successful value menu promotions and strong same-store sales; shares move slightly lower in extended trading

o Zillow Group: slight earnings miss and guidance falls short; shares plunge 16.5%

Commodities: Gold Trims Gains Amid Strong Jobs Data

– remains above $5K, briefly breaching $5.1K before falling back following stronger jobs data that reduced Fed rate cut likelihoods and saw yields rise, with near $84 pushing the gold/silver ratio to 60

– (WTI) intraday breach $65 as energy traders continue to monitor US–Iran tensions with a WSJ report saying another aircraft carrier is being prepared to deploy to the Middle East; EIA’s weekly energy inventory estimates show a build for oil (+8.53m barrels), gasoline (+1.16m barrels) while a draw for distillate (−2.7m barrels); OPEC’s Monthly Oil Market Report maintains 2026 and 2027 global oil demand growth forecasts at 1.38 m bpd and 1.34 m bpd, respectively

FX/Central Banks/Crypto: Small Dollar Lift

– Consecutive red session for briefly falling beneath $66K yesterday before recovering to $67K this morning, with falling below $2K

– neared 97 at one point but so far sticking to the 96 handle in all up following the stronger-than-expected January jobs report; in focus as the pair gets into the lower 152 handle and nears a key short-term support level

– Federal Reserve’s Schmid warns against further cuts to avoid prolonging inflation and sees the labour market breakeven rate between 40-50K per month, Miran that the stronger jobs report doesn’t mean they can’t lower rates, and Hammack that labor market broadly in balance but inflation is still too high

– European Central Bank’s Makhlouf that uncertainty means taking a meeting-by-meeting approach, Nagel that new reality calls for more EU debt, and Schnabel that Europe is a continent with “huge potential”

– Japan’s top currency diplomat says they aren’t lowering their guard at all despite gains in the yen

Capital.com Client Sentiment:

– Indices: Small changes in sentiment for key U.S. equity indices opting to remain in majority buy territory; elsewhere, a significant long unwind in the (at 56% from 69% yesterday no longer in heavy buy territory) following the sizable gains, with a lighter unwind in the ASX (from 81% to 77% no longer in extreme buy territory)

– Commodities: Small gains result in a small trim in long bias causing it to fall out of extreme buy in gold (77% from 79%) and a notch lower in silver but remaining in extreme long territory (83% from 84%), with gains in energy reducing buy sentiment in both WTI (heavy buy 70% from 72%) and (extreme buy 78% from 83%)

– FX: Shifts in (from a slight buy 51% to a slight sell 51%) and (from a slight sell 51% to a slight buy 52%) while moves away from the middle in USD/JPY (from a slight buy 54% to a moderate 62%) as the pullback sees more shorts exit and longs enter as it approaches a short-term support zone

Data: A Story of Beats

– U.S. in January up 130K a clear beat compared to 70K expectations (though November and December revised lower) and saved mainly by health care and social assistance, falls a notch to 4.3% (household survey shows growth of 528K), U6 falls from 8.4% to 8%, and labor force participation rises a notch to 62.5%; average hourly earnings jump 0.4% m/m, slightly above 0.3% forecast, with annual growth holding at 3.7%; Treasury budget deficit for January comes in at $95B vs $86.5B expected; weekly mortgage applications little change down only 0.3%

– Australian consumer inflation expectations (MI) for the next 12 months jump from 4.6% to 5%