US Big-5 Worth Close To $3 Trillion

Since the US election in November, the 5 biggest stocks on the NASDAQ: Amazon, Apple, Facebook, Google and Microsoft have gained an extraordinary $675 billion in market capitalization.

This move higher pushes their collective valuations to close to $3 trillion, or over 10% of the entire US market.

To put this into a global context, that’s more than the total value of stocks in any single equity market worldwide except the UK, China, Japan, Hong Kong and the USA.

Mixed Payroll Data Lifts The Dow

US January Non-Farm Payrolls increased 227,000, which was well above consensus expectations of around 175,000.

The December revision was little changed at 157,000 from the 156,000 reported last month and the three-month average increased to 183,000 from 148,000 previously.

Unemployment rose to 4.8% from 4.7% the previous month and compared with expectations of an unchanged rate on the month.

Average earnings rose 0.1% for the month and this was well below consensus forecasts for a 0.3% gain. The December increase in average earnings was also revised down to 0.2% from the originally reported 0.4%.

The annual increase in earnings, therefore, slowed to 2.5% from 2.9% previously and was well below the 2.9% expected rate.

The stronger headline jobs number combined with weaker wages reduced the pressure on the FOMC to raise rates at their March meeting. This is reflected in the Fed Funds futures market where the implied probability of a rate hike fell from 18% prior to the payroll data to 9% by the New York close.

This market sentiment that rates could stay “lower for longer” lifted US Stock Indexes with the Dow and SP 500 gaining just under 1% for the day and the NASDAQ adding just over .50%

Chart – Dow Jones