Friday's Markets Update (February 2, 2024)

02 Feb 2024 by rate3

On Friday, the latest data shows that unemployment remains steady at 3.7%, and the economy continues to add jobs at an increasing rate. Despite this, stocks have reached record highs again, boosted by strong results from tech giants. Meta surged a record +20%, Amazon gained ~8%, and Nvidia rose ~5%. On the world's markets, Chinese stock indexes continue to decrease due to trader pessimism regarding the effectiveness of government stimulus and the ongoing Evergrande turmoil. Cryptocurrencies were in the green again with Chainlink leading the market with a +7% increase, followed by Avalanche (+6%). However, BTC (-1%) and ETH (-1%) paused as investors reallocated into other major cryptocurrencies.

Details

Total nonfarm payroll employment rose by 353K (projected 180K) and the unemployment rate remained steady at 3.7% in January 2024, below the forecasted 3.8%. The activity rate was the same at 62.5%, the lowest since February 2023. The number of unemployed decreased by 144 thousand to 6.12 million, while employed individuals dropped by 31 thousand to 161.15 million. (BLS)
Comment: On that single example, you might really appreciate how bureaucrats are distorting the real economic picture using "hard, factual, trustworthy statistical data" to match their corrupt, political narrative. According to government's issued data both (!) employment and unemployment are now decreasing at the same time :)

And the answer is that the U-6 unemployment rate, accounting for all forms of unemployment, rose to 7.2% in January 2024 from 7.1% the prior month.(BLS)
Consumer sentiment (according to the University of Michigan) rose to a 2.5-year high in January as expectations improved (mostly because of a sharp rise in consumers expectations), though assessments of current conditions weakened somewhat. Longer-term inflation expectations edged up but remained relatively subdued.(UoM)

Crypto

Tether Holdings reported a record-breaking Q4 2023 net profit of $2.85 billion (beating JP Morgan), contributing to a $6.2 billion annual net profit. The company removed secured loans from token reserves, achieving 90% cash backing, and invested $1.45 billion in sustainable energy, Bitcoin mining, data infrastructure, AI, and P2P telecommunications technology.(Tether)
DeFi's Daily Unique Active Wallets hit a record 5.3 million with a 262% surge in social dapps. The DeFi sector's Total Value Locked reached $110 billion. NFT trading volume was at $1.5 billion, with Blur leading but focusing on high-value NFTs. $41 million in crypto assets were lost to hackers.(DappRadar)
Polkadot experienced exceptional growth in Q4 2023, with a 93% increase in active parachain addresses and a 150% surge in Cross-Consensus Mechanism Format transfers. This highlights the growing adoption of Polkadot's specialized blockchains and enhanced interoperability.(source)

World Markets

The Shanghai Composite and Shenzhen Component fell 1.46% and 2.24% respectively, hitting a four-year low due to economic uncertainties and negative investor sentiment. Despite stimulus measures, concerns over Evergrande's liquidation and potential US bans led to significant losses in growth stocks.
In December 2023, Brazil's Industrial Production rose 1% YoY, surpassing 0.1% forecasts and November's 1.3%. Historically, the average annual growth rate is 1.68%, reaching 37.20% in 1991 and -27.70% in 1990.(IBGE)

Comment: About the Secretary of Labor interview on the Reuters' channel.

Watching all markets across the world at once and trying to gauge how it reflects on crypto every day for more than one year has put me in a non-enviable position.

This is especially true when I have also constantly listened to political commentaries coming from top-positioned bureaucrats, notably those responsible for economic conditions in the country. One of those emanated from the Secretary of Labor today.

That person came full throttle, congratulating the government for the amazing results they achieved with keeping employment so low, inflation high, and GDP growing. Then, the journalist asked, 'Why then do people can't feel that which reflects in upcoming elections' polls?'

(Like, yes, what about the sky-high mortgage rates, unbelievable costs of food and housing, evaporated bank accounts, mounting lay-offs, and complete destruction of whole sectors of the economy like SME banks, start-ups and innovations, SME finance, and crypto to name just a few?

And, yes, "thanks" to the Boomers' outstanding smear campaign against crypto, we still have 95% of the population absolutely oblivious to the decentralized governance and income-earning alternatives we have created for them during the past 15 years.)

It was absolutely dumb striking to see how the Secretary started to mumble something like, 'We work so hard, but people just too stupid to not recognize that.' That speaks volumes about the soundness of the current political system, which acts now like a dystopian movie about gigantic moving cities which fight each other on the face of dilapidated Earth led by straightforward delusional and mentally deficient megalomaniacs and their small cliques.

These "elected officials" completely ignore reality outside of their high-raised, bulletproof cockpits, driving with eyes wide shut, without front-windows, relying on their medieval dials board. All those "legitimated gangsters" do now is keep cheering the crowd with only goal in mind -- to prolong their stay in power for as long as they could, whatever the cost for the rest of us.

And by the way, all alternatives on the so-called elections (and I am talking worldwide, where more than 50% of the world's population will come into voting cabins this year) are not a tiny-tiny better. So, investors, buckle your seatbelts. So much fun ahead.

On Week 5, trader focus on major corporate earnings and FED's insights. Globally, attention turns to interest rates, inflation, trade data, and economic indicators from countries like Australia, India, China, and Germany.