[True Wisdom Hong Kong Stock Experts] "Non-Farm Payrolls + CPI" Heavyweight Data Shock, US Dollar and US Stocks Diverge

The highly anticipated January non-farm payrolls report has been postponed to Wednesday (February 11), while the January Consumer Price Index (CPI) report has also been delayed until Friday. This means that this week is not only the last trading week before the Chinese New Year but will also face the dual impact of the "Non-Farm + CPI" heavyweight data. This delay is primarily due to the interruption in data collection caused by the previous partial U.S. government shutdown. Although the Trump administration reached a funding agreement with Senate Democrats and ended the shutdown late last Tuesday, the Labor Department still needs time to complete data consolidation and verification.

Current market consensus expects that January non-farm payrolls will increase by approximately 60,000, slightly higher than the sluggish performance of only 50,000 added in December. Regarding the unemployment rate, the market expects it to remain at 4.4%, unchanged from the previous figure. Notably, the "small non-farm" ADP data released last week showed that the private sector added only 22,000 jobs in January, not only below the expected 45,000 but also hitting a new low in recent years. This data suggests that the U.S. labor market continues to be in a stagnant state of "low hiring, low layoffs."

Furthermore, this non-farm report will also include annual employment data revisions. Market consensus expects the revised data to show that U.S. job growth over the year ending March 2025 will be weaker than the preliminary results. If historical data is revised downward, it will reshape the market's perception of the health of the U.S. labor market more effectively than a single month's non-farm data, thereby influencing the Federal Reserve's policy path judgment.

Additionally, the January Consumer Price Index (CPI) report, originally scheduled for release on February 11, has now been adjusted to February 13. The expected year-on-year CPI rate for January is around 2.7%, unchanged from December's data.

Although the Federal Reserve removed the phrase "inflation has risen" after its January policy meeting, recent uncertainties surrounding tariff policies and the stickiness of inflation in the service sector still keep the market vigilant about inflation prospects.

San Francisco Federal Reserve Bank President Mary Daly stated that she believes one or two more interest rate cuts are needed to address the increasingly weak labor market conditions. Daly is particularly concerned about the situation workers face, with high prices eroding wages and limited job opportunities. She pointed out that the difficulties recent college graduates face in finding jobs are a worrying indicator of labor market weakness.

Daly does not have a vote on the Federal Reserve's rate-setting committee this year, but she participates in policy meetings. Her views provide insight into the ongoing discussions among Fed officials.

Expectations of an earlier rate cut led to a significant rally in U.S. stocks last Friday. The Dow Jones Industrial Average rose 1,206 points, a gain of 2.47%, closing at 50,115 points, breaking through and closing above the 50,000-point mark for the first time. The S&P 500 index rose 1.97%, closing at 6,932 points; the Nasdaq Composite Index rose 2.18%, closing at 23,031 points.

From a chart perspective, the Dow is expected to continue rising this week. However, the Nasdaq and S&P 500 lack upward momentum and are likely to fluctuate this week.

(Written by: Professor Li Huifen, Greater Bay Area Family Office Association) (The author does not hold the above-mentioned stocks)