You know it's likely to be bad when the warnings keep pouring in about the January jobs report. White House Press Secretary Jen Psaki said she wants to "prepare" the public, National Economic Council Director Brian Deese is calling it "confusing" and even Labor Secretary Marty Walsh said to take the figures with a grain of salt. The non-farm payrolls report will come out at 8:30 a.m. ET and investors are bracing for another uncertain number, adding to the volatile market environment.

What's going on? The Bureau of Labor Statistics collects jobs data during the pay period that includes the 12th day of the month. In January, that week coincided with new Omicron cases peaking in the U.S., when millions were calling out sick, quarantining or caring for others. If staff were not eligible for paid leave, they are going to be marked down as not working. January is also a month with extreme seasonal adjustments (think temporary holiday workers), while household survey data could be affected by new establishments and population controls.

Recall that Federal Reserve Chair Jerome Powell has said he doesn't place a large amount of importance to any one month of jobs data, as the month-to-month figures can be volatile. The funny thing is, the big misses have happened multiple times in recent months (Dec. 199K vs. 400K, Nov. 210K vs. 550K, Sept. 194K vs. 500K, and Aug. 235K vs. 750K). Paid sick leave is also known to be available to 79% of civilian workers, according to government data, so the forecasts should reflect that. Over the course of 2021, 1.9M payroll additions were still added to the economy, but with severe misses over many months, do we need a better system to calculate non-farm payrolls or estimates?

The good: "As far as [the jobs market] being weak, I don't know if anyone's going to give it much credence," said Jim Paulsen, chief investment strategist at The Leuthold Group. "You've clearly got Omicron cases collapsing. You're seeing some high-frequency data showing some pretty significant pickups. I just think that calms a lot of the marketplace."

The bad: "A weak jobs report means a longer runway for inflation until workers come back into the workforce to provide relief to widespread shortages," declared Bryce Doty of Sit Investment Associates.

The ugly: "The January drop in employment is another reminder that the economy will not fully return to normal until the pandemic is over," added Gus Faucher, chief U.S. economist at PNC.

Analyst estimates: Consensus forecasts from economists anticipate employers only added 150K jobs last month, but some are flagging (much) worse figures. Deutsche Bank sees a gain of 125K, Citigroup sees growth of 70K, while Standard Chartered forecasts a net addition of just 50K. A contraction is also possible, with Capital Economics suggesting that non-farm payrolls may have actually fallen by 200K, Goldman sees a 250K drop, Pantheon Macro puts the decline at 300K and PNC even projects a plunge of 400K. Meanwhile, the unemployment rate is seen remaining unchanged at 3.9%, with average hourly earnings rising by 0.5%, boosting the annual increase to 5.2% from 4.7% in December.

Prime earnings

Facebook is still looking for friends after a massive plunge that saw parent Meta (FB) lose $251B in market value - the biggest single-day equity wipeout ever - but things were more welcoming elsewhere in Big Tech. Amazon (AMZN) reported a set of bumper earnings late Thursday that smashed operating income and EPS expectations, sending shares up 12% after the bell. In fact, the divergence in stock prices saw Mark Zuckerberg lose $29B in net worth, while Jeff Bezos added another $20B to his personal valuation.

Catalysts: Investors cheered news that Prime annual membership will be hiked to $139, a $20 increase from the current subscription fee of $119. The price rise will go into effect on March 25 (and Feb. 18 for new members), reflecting higher wages and transportation costs. Amazon also received a big boost from its investments in electric vehicle company Rivian (RIVN), as well as surging revenue from its AWS cloud computing unit (+40% to $17.8B) and advertising businesses (+32% to $9.7B).

"As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron," said CEO Andy Jassy. "Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic."

A little short? Even with the forecast, Amazon expects Q1 revenue of $112B-$117B vs. a $121B consensus on Wall Street and operating income of $3B-$6B vs. a $6.35B consensus.

Oil tops $90

With inventory levels in Cushing at multi-year, seasonally-adjusted lows, and prices for the U.S. crude grade encroaching on seaborne levels, WTI is trading above $90 for the first time since mid-2014. Currently, global crude inventories are at unusually low levels, meaning supply increases from OPEC+ and American shale will need to meet post-pandemic demand (if oil prices are to remain at current levels). Unfortunately for consumers and oil-price bears, OPEC+ continues to miss quotas, while shale heavyweights like Conoco (COP), Exxon (XOM) and Chevron (CVX) have all budgeted for flat, portfolio-wide output growth in 2022.

Quote: "The oil market is so tight that any shock to production is going to send prices soaring," explained Ed Moya, senior market analyst at OANDA.

Remember, the U.S. coordinated a release 50M barrels of oil from the U.S. Strategic Reserve in November, when prices were still under $80. While the move was meant to lower prices, the volumes announced were much less than the market was expecting and would need to be sustained over a longer period of time. A large portion of the barrels was also set to be exported to China and India, since the supplies comprised of sour crude, a type of oil that many American refiners are avoiding due to its high sulfur content and makes it more expensive to process.

Next stop? A number of Wall Street analysts have already forecast $100 oil, with WTI up nearly 20% YTD, building on 2021's more than 50% gain. Geopolitical tensions have meanwhile sent jitters through the market, especially the recent standoff playing out between Russia and Ukraine. The trends are also highly inflationary, posing trouble for central bank policymakers around the globe.

Citius, Altius, Fortius?

The Beijing Winter Olympics officially kick off today, but you wouldn't know that from the latest slate of advertising campaigns. Many companies are facing pressure to acknowledge China's abuses of its minority Uyghur population in Xinjiang, along with other human rights issues and authoritarian control. Top American sponsors like Airbnb (NASDAQ:ABNB), Coca-Cola (NYSE:KO), Intel (NASDAQ:INTC), Procter & Gamble (NYSE:PG) and Visa (NYSE:V) are lying low in their Olympic-themed commercials, and there hasn't been many displayed on TV or social media in the U.S.

Bigger picture: It's a tough environment to navigate with their consumers and corporations are likely to get far less on their investment return in this situation. In fact, those who are advertising have largely steered clear of mentioning the location of the Games or any hint of politics. An example from Delta Air Lines (NYSE:DAL) saw the "official airline of Team USA" release a commercial spotlighting skiers, snowboarders and figure skaters, but no where is "Beijing" or even a reference to the "Olympics" mentioned in the clip.

While American athletes are free to compete, the U.S. government is boycotting the 2022 Winter Olympics, meaning diplomatic personnel will be barred from the event. No major representatives from U.S.-aligned democratic nations will be present either (though France is sending its sports minister). In fact, Russia's Vladimir Putin will be among those greeting Chinese leader Xi Jinping today and attending the opening ceremony.

Bottom line: "This is going to be the new-era Olympics, more triumphalist in design and tone," said Christopher Johnson, president of risk consultancy China Strategies Group in Washington. China's message is, "We're here, get used to it."

Today's Markets

In Asia, Japan +0.7%. Hong Kong +3.2%. China closed. India -0.2%.
In Europe, at midday, London +0.2%. Paris -0.6%. Frankfurt -1.3%.
Futures at 6:20, Dow -0.2%. S&P +0.2%. Nasdaq +0.9%. Crude +1.4% $91.55. Gold +0.5% at $1813.80. Bitcoin +4.1% to $37,880.
Ten-year Treasury Yield -1 bps to 1.81%

Today's Economic Calendar

8:30 Non-farm payrolls
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »

What else is happening...

Divergence: Bank of England hikes rates; ECB stays on hold.

Hong Kong soars 3% as traders return from Lunar New Year.

Snap (NYSE:SNAP) skyrockets on first-ever quarterly net profit.

Pinterest (NYSE:PINS) jumps as revenue, profits easily clear bar.

Clorox (NYSE:CLX) stumbles on narrowing sales, margins and bleak outlook.

Activision Blizzard (NASDAQ:ATVI) misses on earnings, sees user decline.

ConocoPhillips (NYSE:COP) bumps capex and dividends, not production.

End of the boom in sight for U.S. shale drillers - WSJ analysis.

Rivian (RIVN) vs. Lucid (LCID)? Morgan Stanley sees clear EV winner.