What Will Move Markets Now?

Ups and downs

Last week, markets swung wildly on economic news, as investors tried to interpret signals from the Fed about inflation and interest rates. This week, corporate earnings took the spotlight, and things looked steadier — for a while.

Volatility is back, in a big way. Meta dragged down the market yesterday following an earnings report that revealed several signs of trouble. Its decline erased more than $230 billion from its market cap, the biggest one-day loss, in dollar terms, in history.

But after the bell, Amazon reported bumper earnings, and the market turned around sharply in after-hours trading, with Amazon jumping nearly 20 percent at one point. (For those keeping score, that meant Meta’s Mark Zuckerberg lost $29 billion in net worth while Amazon’s Jeff Bezos gained $20 billion.) Tech stocks like Pinterest and Snap that were pulled down by Meta also turned around after reporting better-than-expected earnings: Snap’s shares rose more than 50 percent in after-hours trading.

The markets are flat today, but the jobs report could scramble everything again. Futures suggest a subdued open, for now, but attention has returned to the economy. This morning, the government will report how many jobs employers added in January, and like all of the other signals of late, it’s going to be messy. Forecasts from economists run from a gain of 250,000 jobs to a loss of 400,000, an unusually wide range. “It’s going to be a hot mess,” said Skanda Amarnath of Employ America, a research group.

• The Omicron coronavirus wave spiked mid-January, just as the government was collecting data for the report, but there is little evidence so far that the wave caused lasting economic damage.

• The unemployment rate could fall even if hiring slowed, because the spike in Covid cases may have led some to suspend job searches. The government considers someone unemployed only if they are actively looking for work.

• The first month of the year is typically hard to measure anyway. Employers release holiday workers, and the ebb and flow of the pandemic is likely to mess with normal seasonal adjustments.

What will it all mean for the Fed’s planned rate increases? Likely not much, said Vincent Reinhart, the chief economist at Dreyfus and Mellon and formerly of the Fed. That said, if the payroll number comes in weaker than expected, it may reduce the chances that the central bank raises interest rates by a more aggressive half-point, instead of an expected quarter-point, in March.

What will it mean for markets? Given the swings of recent days, that’s anyone’s guess.

The Times is covering the reaction to today’s jobs report in a special live briefing.

HERE’S WHAT’S HAPPENING

The Winter Olympics in Beijing begin, and so does NBC’s challenge. The broadcaster faces huge logistical difficulties, from doing most commentary remotely to creating excitement for events that are largely spectator-free and addressing U.S.-China tensions.

Austria’s coronavirus vaccine mandate is set to become law. The country will become the first Western democracy to require nearly all adults to get inoculated, in a test of using the law to overcome vaccine resistance. In the U.S., BNY Mellon and American Express will bring workers back to the office next month in hybrid-working arrangements.

Rising food prices threaten to stoke social unrest. Food prices have hit a decade high, straining incomes around the world, according to the U.N. Meanwhile, many Britons are struggling with climbing inflation and energy prices.

Two Biden regulator nominees face tough paths to confirmation. Sarah Bloom Raskin, who is up to lead banking regulation at the Fed, faced hostile questions from Republicans about whether the central bank should use its powers to fight climate change. And Dr. Robert Califf, the nominee to lead the F.D.A., faces opposition from Republicans over his views on abortion and from Democrats over his ties to the pharmaceutical industry.

Rivian gives earnings boosts to two big investors. Both Ford and Amazon benefited from the rising valuation of the electric vehicle maker, which went public last fall. That boost may not be repeated, however: Rivian’s share price has fallen steadily over the past two months.

Recriminations fly over CNN chief’s ouster

The media world is still grappling with the unexpected resignation of Jeff Zucker as the head of CNN — not least of all the network’s own stars. Reporters are digging into how and why Zucker lost his job, and what it means for the impending sale of CNN’s parent company, WarnerMedia.

CNN stars sharply questioned WarnerMedia’s chief. Jason Kilar met with the network’s top Washington talent on Wednesday, and was asked why Zucker was pushed out over a romantic relationship that wasn’t exactly a secret. The anchor Jake Tapper asked whether the ouster, which arose out of an investigation into the firing of Chris Cuomo for covertly advising his brother, Andrew Cuomo, unfairly punished Zucker. “How do we get past the perception that this is the bad guy winning?” Tapper asked.

Speculation grows about the motivations behind the move. News reports said that while David Zaslav, Discovery’s C.E.O. and a close friend to Zucker, didn’t know about the ouster ahead of time, Discovery executives viewed it as a “fresh start” for CNN. Discovery’s biggest shareholder, John Malone, had already made clear he wasn’t a fan of Zucker’s vision for the network. And Rolling Stone dug deeper into the connections between the Cuomo investigation and Zucker’s departure.

“Tell everyone to come back. Give them a bonus to burn the Zoom app.”

— New York Gov. Kathy Hochul to a group of business leaders in Manhattan, where she talked about taxes, crime and what it would take to get workers to return to the office.

What’s next for oil prices?

The price of U.S. benchmark crude yesterday topped $90 a barrel for the first time since 2014. It is up nearly 40 percent in the past two months.

Rising oil prices are typically a sign of a strong economy. They are certainly helping profits at energy companies, which have been the best performers in the S&P 500 this year by a wide margin. But with the rest of the market swinging on difficult-to-read economic trends, some point to other factors pushing up oil prices:

• Russia: The prospect of a Russian invasion of Ukraine comes as oil supplies are already tight. Russia produces roughly a tenth of the world’s oil, and any disturbance because of war or sanctions would push up global prices. Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington, wrote this week that a significant disruption could result in prices “well above $100 per barrel.”

• Omicron: Goldman Sachs analysts wrote that a relatively small drop in energy use linked to the surge in coronavirus cases, offset by a rise in demand for heating oil, led to the recent jump in prices. What’s more, they added, shale producers have been pumping below expectations. That could push oil prices higher for some time, with the analysts forecasting prices above $100 a barrel next year.

What could bring oil prices down? Some analysts see relief on the way. OPEC and its oil-producing allies announced this week that they would gradually increase supply. And some expect that the U.S. could strike a new nuclear arms treaty with Iran this year that would increase supply from that country as well. Analysts at Oxford Economics expect accelerating output to reduce oil prices by the end of this year.

Weekend reading: What matters?

Arguing that companies need a higher purpose beyond making money was somewhat radical before the pandemic. Now, it is practically cliché amid the “Great Resignation,” which has been partly attributed to workers’ urgent and profound need to do something meaningful, heightened by the global crisis.

Ranjay Gulati, a professor at Harvard Business School, used to be skeptical of the claims that purpose was productive, let alone necessary, for companies. But his students’ persistent interest in the subject challenged him to dig deeper. He spent three years studying the quest for meaning — in life and business — and spoke to DealBook about the result, captured in his new book, “Deep Purpose: The Heart and Soul of High-Performance Companies.” The interview has been edited and condensed.

Why the initial doubt about purpose in business?

It sounds so obvious — companies should have a noble goal and articulate it to motivate employees. But so often these statements are meaningless, which makes purpose seem like wallpaper, something to trot out in a P.R. debacle. I found, however, that deep purpose drives companies and people.

What ultimately changed your mind?

Purpose is social stuff, a subjective construct. It’s emotional and best conveyed by true believers who are poetic leaders. I discovered when I spoke to founders of start-ups that had grown quickly that they were often nostalgic about difficult beginnings and talked about the company losing its “heart” or “essence” or “soul.” That was telling. At the same time, there was the pandemic and social strife driving a crisis of meaning that was visible in the actions of workers — at Delta, for example, when employees demanded the company take a stand on voting rights.

Are there downsides to these convictions?

Deep purpose can be inconvenient. If a company says it wants to benefit society as well as shareholders, it has to look closely at the consequences of its decisions and pay a price for the principles. It can’t launch dangerous products that could be profitable, for example. Purpose isn’t just about inspiration, but also responsibilities and duties.

Can you quantify the benefits of this corporate soul-searching?

Connecting with a deep purpose is motivational and drives productivity. It’s good for reputation because customers trust companies and products that stand for something. It provides clarity of direction for businesses and workers and it improves relationships with stakeholders.

THE SPEED READ

Deals

• Tiger Global, one of the most prolific investors in start-ups, has raised $11 billion for its latest venture fund. (The Information)

• The main fund of Ken Griffin’s Citadel reportedly gained 5 percent last month, while the S&P 500 slumped. (Bloomberg)

• Andreessen Horowitz is said to be in talks to invest in the start-up behind the Bored Ape Yacht Club N.F.T.s at a valuation of at least $4 billion. (FT)

Policy

• Did the start-up Neuralink mislead the S.E.C. about Elon Musk’s role at the company? (Fortune)

• Workers at a G.M. plant in Mexico voted to form a new union, testing the revamped North American Free Trade Agreement’s labor protections. (NYT)

• Energy Secretary Jennifer Granholm acknowledged paying $400 in penalties for late reporting of stock trades. (Insider)

Best of the rest

• MacKenzie Scott donated over $133 million to the education nonprofit Communities in Schools, her latest huge philanthropic gift. (Insider)

• Rotterdam may briefly disassemble a historic bridge to let a $500 million superyacht commissioned by Jeff Bezos pass through. (NYT)

• Former employees of the newly renamed Washington Commanders N.F.L. team raised new sexual harassment claims against the franchise’s owner, Dan Snyder. (WaPo)

• “A Teenager Tracked Elon Musk’s Jet on Twitter. Then Came the Direct Message.” (NYT)

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