Thursday's Markets Update (October 5, 2023)

06 Oct 2023 by rate3

On Thursday, Nasdaq fell slightly today in reaction to resilient labor market data, which points to more rate hikes. In the broader market, consumer staples, materials, and industrials led the downside. BTC and ETH tumbled on technicals, confirming the bearish trend. Other news: Hong Kong-based CMCC Global raised $100 million in a crypto fund; the Basel Committee requires banks to disclose their crypto asset holdings.

Details

According to a report by Challenger job cuts slowed in September (47K, below 75K in August) but remain elevated, with technology leading the way. Despite the layoffs, employers also announced plans to add jobs. Also, new unemployment claims rose slightly last week, but remained near a seven-month low. Continuing claims unexpectedly fell, suggesting that the labor market remains strong.

Comment

The Challenger, Gray & Christmas job cuts report is a monthly report that tracks the number of job cuts announced by US employers. The report is compiled from press releases and other publicly available information. The Challenger report is one of the most widely followed measures of job cuts in the US, and it is often cited by economists and the media.

The Challenger report has a long history, dating back to 1984. The report is generally considered to be reliable, but it is important to note that it is only a measure of announced job cuts. It does not include job cuts that are not announced publicly, such as layoffs at small businesses or government agencies.

The Challenger report has been used to predict recessions in the past, but it is not a perfect predictor. For example, the Challenger report showed a sharp increase in job cuts in the months leading up to the 2008 recession, but it did not predict the timing of the recession accurately.

The Challenger report is often compared to the Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey (JOLTS) report. The JOLTS report is a monthly report that tracks the number of job openings, hires, and separations in the US. The JOLTS report is considered to be more comprehensive than the Challenger report, but it is also less timely. The JOLTS report is released about 30 days after the end of the month that it covers, while the Challenger report is released about 10 days after the end of the month that it covers.

The JOLTS report is also generally considered to be more reliable than the Challenger report. The JOLTS report is based on a survey of employers, while the Challenger report is based on press releases and other publicly available information.

However, both the Challenger report and the JOLTS report have their limitations. The Challenger report only measures announced job cuts, and the JOLTS report does not include job cuts that are not announced publicly. Additionally, both reports can be revised after they are initially released.

Crypto

CMCC Global raised $100M in a crypto fund to support Asian blockchain startups. The fund, Titan Fund, is administered by State Street and audited by EY. Block.one is the fund's lead investor.
The Basel Committee on Banking Supervision is proposing new rules that would require banks to disclose their crypto asset holdings. This is part of an effort to increase transparency and reduce risks in the banking sector.
Comment

It is a shame that the political games of one person, SEC Gary Gensler, are driving the crypto industry out of the country. This is giving our geopolitical rivals a huge advantage.

Gensler has repeatedly made it clear that he is hostile to the crypto industry. He has proposed new regulations that would stifle innovation and make it difficult for crypto companies to operate. As a result, many crypto companies are moving to other countries, where they are more welcome.

The crypto industry is one of the most innovative and rapidly growing industries in the world. It is creating jobs and attracting investment. By driving the crypto industry out of the country, Gensler is hurting the economy and giving our geopolitical rivals an advantage.

We urge Gensler to reconsider his approach to the crypto industry. He should work with the industry to develop regulations that promote innovation and protect consumers, rather than stifle growth.