Friday's Markets Update (March 8, 2024)

09 Mar 2024 by rate3

On Friday, Nasdaq, S&P and Dow hit new ATH but then stocks retreat after chip sellof. The unemployment went up unexpectedly. Fed rate cut bets in June stay. On world’s markets, Euro zone GDP flat. BTC reached 70K and then retreated to 66K in a second wave of profiteering. ETH reached over 4K. The rest of the crypto market wend down after BTC with most coins correcting 1–3%.

Details

Feb unemployment at 3.9%, highest since Jan 2022 (up from 3.7% expected). Unemployed rose by 334k to 6.5 million. (BLS)
Crypto

Retail crypto interest is rising (website traffic, Google searches) but not at peak levels (compared to 2022). Bitcoin searches up, “how to buy” less so. Ethereum searches stronger. Crypto app usage climbs (Coinbase) but isn’t near peak. Retail seems hesitant for full commitment. (source)
World Markets

Eurozone GDP flat (0.1% yoy) in Q4 2023, matching Q3. France, Italy, Spain grew, Germany shrank. (ES)
Currencies

Dollar tumbles to mid-January low (102.5) on cooling US jobs data. Strong Feb payroll hides revisions down, unemployment up, wage growth slows. 57% chance of Fed rate cut in June. Greenback falls most vs. yen, pound, and Aussie dollar. Weekly: -1.4%.
Commodities

Gold hits record high at $2,200 on rate cut bets. Feb jobs strong, revisions lower, unemployment up. Wage growth slows. 60% chance of Fed rate cut in June expected.
On Week 11: markets analysts will focus on: inflation, retail sales, and consumer sentiment. UK watches jobs, GDP, and trade. China’s loans, car sales, and housing market in focus. Brazil, India, and Russia’s inflation rates key. Eurozone and India’s production along with Australia’s business confidence round out the global economic data picture.

Comment: Where are we going?

So, the story of this week (and of many previous one) is a paradoxical one. While assets like BTC, domestic and international stocks, and gold are all rallying, the underlying state of the world seems to be deteriorating rapidly. Economies are struggling, with unemployment rising and GDP slowing or stalling . Many ridicule Powell and his political friends for celebrating a non-existent victory over inflation. Despite Powell’s attempt to appear confident during his Congressional testimony, it contrasted sharply with polls showing growing consumer unease.

The question remains: where are we headed? Everyone seems to be expecting rate cuts in June, hence the current stock and BTC rally. But what if the Fed doesn’t cut rates, or if FOMC members make more hawkish comments, leading to a sudden shift in investor sentiment and renewed focus on the troubled economy?