Nasdaq 100 Forecast: QQQ falls after NFP smashed forecasts

US futures

Dow future -0.34% at 42395

S&P futures -0.4% at 5873

Nasdaq futures -0.53% at 21050

In Europe

FTSE -0.15% at 8300

Dax  0.16% at 20352

• US NFP rises 256k vs 164k forecast
• Unemployment eases to 4.1% from 4.2%
• The first Fed rate cut is now pushed back to October
• Oil rises 3% on supply worries

US job creation soars & unemployment falls

U.S. stocks are set to open lower after the US non-farm payroll report shattered expectations, dampening expectations for Fed rate cuts.

The closely watched report showed that 256,000 jobs were added in December, well ahead of the 164,000 forecast. The unemployment rate unexpectedly fell to 4.1%, down from 4.2%, and average hourly earnings rose 0.3%, in line with expectations.

Given the strength in the US jobs market and the solid data we've seen this week, there is little reason for the Fed to consider rate cuts for now.

The market is pricing in just 29 basis points of cuts for the year, down from 38 basis points prior to the data. The first rate cut is now being pushed out until October from June. The market here is lagging the Fed's recent call for 225 basis point rate cuts in 2025. Given the change in administration, there's no knowing what the economy could look like by October. As far as the market is concerned, policymakers are on the sidelines until further notice

Following the data, US 10-year treasury yields rise along with the USD and stocks are falling. Interestingly, gold continues rising, possibly as a hedge against inflation.

Attention will now turn to next week's inflation data for further clues over the Fed’s next moves.

US futures Dow future -0.34% at 42395 S&P futures -0.4% at 5873 Nasdaq futures -0.53% at 21050 In Europe FTSE -0.15% at 8300 Dax 0.16% at 20352 US NFP rises 256k vs 164k forecast Unemployment eases to 4.1% from 4.2% The first Fed rate cut is now pushed back to October Oil rises 3% on supply worries US job creation soars & unemployment falls U.S. stocks are set to open lower after the US non-farm payroll report shattered expectations, dampening expectations for Fed rate cuts. The closely watched report showed that 256,000 jobs were added in December, well ahead of the 164,000 forecast. The unemployment rate unexpectedly fell to 4.1%, down from 4.2%, and average hourly earnings rose 0.3%, in line with expectations. Given the strength in the US jobs market and the solid data we've seen this week, there is little reason for the Fed to consider rate cuts for now. The market is pricing in just 29 basis points of cuts for the year, down from 38 basis points prior to the data. The first rate cut is now being pushed out until October from June. The market here is lagging the Fed's recent call for 225 basis point rate cuts in 2025. Given the change in administration, there's no knowing what the economy could look like by October. As far as the market is concerned, policymakers are on the sidelines until further notice Following the data, US 10-year treasury yields rise along with the USD and stocks are falling. Interestingly, gold continues rising, possibly as a hedge against inflation. Attention will now turn to next week's inflation data for further clues over the Fed’s next moves. Corporate news Taiwan Semiconductor Manufacturing rose 1.2% after the world's largest contract chipmaker posted better-than-expected sales for Q4, boosted by robust demand from the fast-growing AI industry. Nvidia is set to open 1.6% lower following a report that new US restrictions on chip exports could be announced soon. Delta Airline is set to fly almost 7% higher after posting Q4 earnings that beat analysts estimates boosted by strong travel demand. Walgreens Boots Alliance is set to open 11% higher after the pharmacy retailer posted Q1 earnings and revenue ahead of forecasts and delivered and an upbeat annual forecast. Nasdaq 100 forecast – technical analysis. Nasdaq 100 failed at 21,200 resistance and fell below the 50 SMA but remains within the holding pattern with no material breakdown yet. Sellers will need to break below 21,500 the December and January lows to create a lower low. Any recovery would need to rise above 21,620 to create a higher high. FX markets – USD rises, GBP/USD falls The USD is rising after a stronger-than-expected U.S. jobs market dampened expectations surrounding further Fed rate cuts in 2025. EUR/USD is hovering around an A2 year low following strong U.S. jobs data, which further drives Fed ECB divergence. The ECB is expected to cut interest rates again in January and four times across 2025. In contrast, the Fed may cut rates just once this year. GBP/USD is sliding for a fourth straight day as gilt yields rise for a fifth consecutive session, and British assets remain under pressure. GBP USD trades close to a 14-month low, as the UK has been among the markets most hit by a surge in global borrowing costs. Sterling is down 1% on the week, with gilts underperforming peers. Oil rises as supply concerns persist. Oil prices jump over 3% on Friday and on track for a third straight week of gains on supply concerns amid expectations of more sanctions on Russia and Iran. WTI has now gained over 10% across three short weeks. With Trump's inauguration on January 20th, the market is becoming more focused on potential supply disruptions from tighter sanctions against Iran and Russia. These could materialize even earlier, with Joe Biden expected to announce new sanctions on the Russian economy before Trump takes office. Meanwhile, expectations of below-average temperatures in the US whilst parts of Europe also being hit by extreme cold are boosting demand in the energy complex. Interesting oil prices have rallied despite the strength of the U.S. dollar, which makes crude oil more expensive for buyers outside the US.

Corporate news

Taiwan Semiconductor Manufacturing rose 1.2% after the world's largest contract chipmaker posted better-than-expected sales for Q4, boosted by robust demand from the fast-growing AI industry.

Nvidia is set to open 1.6% lower following a report that new US restrictions on chip exports could be announced soon.

Delta Airline is set to fly almost 7% higher after posting Q4 earnings that beat analysts estimates boosted by strong travel demand.

Walgreens Boots Alliance is set to open 11% higher after the pharmacy retailer posted Q1 earnings and revenue ahead of forecasts and delivered and an upbeat annual forecast.

Nasdaq 100 forecast – technical analysis.

Nasdaq 100 failed at 21,200 resistance and fell below the 50 SMA but remains within the holding pattern with no material breakdown yet. Sellers will need to break below 21,500 the December and January lows to create a lower low. Any recovery would need to rise above 21,620 to create a higher high.

FX markets – USD rises, GBP/USD falls

The USD is rising after a stronger-than-expected U.S. jobs market dampened expectations surrounding further Fed rate cuts in 2025.

EUR/USD is hovering around an A2 year low following strong U.S. jobs data, which further drives Fed ECB divergence. The ECB is expected to cut interest rates again in January and four times across 2025. In contrast, the Fed may cut rates just once this year.

GBP/USD is sliding for a fourth straight day as gilt yields rise for a fifth consecutive session, and British assets remain under pressure. GBP USD trades close to a 14-month low, as the UK has been among the markets most hit by a surge in global borrowing costs. Sterling is down 1% on the week, with gilts underperforming peers.

Oil rises as supply concerns persist.

Oil prices jump over 3% on Friday and on track for a third straight week of gains on supply concerns amid expectations of more sanctions on Russia and Iran.

WTI has now gained over 10% across three short weeks.

With Trump's inauguration on January 20^th, the market is becoming more focused on potential supply disruptions from tighter sanctions against Iran and Russia. These could materialize even earlier, with Joe Biden expected to announce new sanctions on the Russian economy before Trump takes office.

Meanwhile, expectations of below-average temperatures in the US whilst parts of Europe also being hit by extreme cold are boosting demand in the energy complex.

Interesting oil prices have rallied despite the strength of the U.S. dollar, which makes crude oil more expensive for buyers outside the US.