Stock Market News
Dated:-06-12-2024
It appears that Wall Street is stagnating. Friday before the release of the US jobs report, which is closely monitored for hints about future Federal Reserve policies. When Bitcoin falls down below $100,000, investors may switch to cash, endangering its hegemony.
1. Payrolls are a big concern.Everyone's eyes The US payroll data release on Friday, which is scheduled for later in the day, will provide new information about the state of the economy in advance of the Federal Reserve's December meeting.
After disruptions from strikes and hurricanes severely limited job creation, economists anticipate that the economy will have added 202,000 positions in November, a significant recovery from the dismal 12,000 jobs added in October.
Since December 2020, that gain was the smallest.
Given that US private payroll growth slowed in November and that the number of Americans submitting new unemployment benefits applications increased somewhat last week, such a resurgence is unlikely to change market views that the Federal Reserve will lower interest rates once more later this month.
However, a rerun of the spectacular jobs report from September might derail hopes for more Fed rate reduction.
According to CME's FedWatch tool, financial markets presently estimate a roughly 70% possibility of a 25 basis point rate drop at the US central bank's policy meeting on December 17–18.
2. Expectations remain stable ahead of nonfarm payrolls
Due to investors' reluctance to commit before the release of the highly anticipated monthly official jobs report, US stock futures saw minimal movement on Friday.
The S&P 500 futures increased 3 points, or 0.1%, the Dow futures contract increased 20 points, or 0.1%, and the Nasdaq 100 futures increased 23 points, or 0.1%, around 03:50 ET (07:50 GMT).
Thursday saw the major benchmarks retreat from their record highs from the previous session, with the Dow Jones Industrial Average leading the way with a decline of about 250 points, or 0.6%.
The tech-heavy Nasdaq Composite has gained 2.5 percent, the broad-based S&P 500 has risen 0.7%, and the DJIA has slightly declined so far this week.
After Fed Chair Jerome Powell said earlier in the week that the world's largest economy was robust enough for the central bank to proceed cautiously with rate decreases, investors will be watching the publication of nonfarm payrolls for hints about the strength of the US labor market.
The corporate side will be dominated by businesses such as Ulta Beauty (NASDAQ:ULTA), Gitlab (NASDAQ:GTLB), and DocuSign (NASDAQ:DOCU), all of which posted positive earnings following Thursday's closure.
3. Will Bitcoin's hegemony wane?
Following its breach of the $100,000 barrier earlier in the week, Bitcoin fell further on Friday, and its supremacy as the most popular cryptocurrency in the world may be coming to an end.
Bitcoin was up more than 1% this week at 03:50 ET, down 4.3% to $98,550.0.
This week, the digital currency soared to all-time highs on hopes of more lenient restrictions under Donald Trump, with the latest Trump's nomination of pro-crypto attorney Paul Atkins as the next chairman of the Securities and Exchange Commission is the most recent indication of his support.
Bitcoin's relative share of market capitalization dropped to 53.9% on Friday, according to Coinmarketcap data, after reaching a three-year high of almost 59% in late November. The market value of the whole cryptocurrency industry reached a record high of $3.7 trillion on Thursday.
Citi analysts cautioned that regulatory clarity might weaken the coin's hold on the cryptocurrency market by increasing the attraction of the asset class and promoting strength in coins and tokens other than Bitcoin.
In the long run, we believe that a network's utility or value will be influenced by its utilization, production costs, and macro correlations. According to a report by Citi analysts, "a new regulatory regime may unlock further or broader use cases for blockchain assets."
4. Cash is used by investors.
Investors have turned to cash this week due to uncertainty over whether the recent advances on Wall Street, which have led to record closing levels, can continue.
Investors poured $136.4 billion into cash in the week ending Wednesday, according to a Bank of America research released earlier Friday. This was the largest weekly inflow since March 2023, when a regional financial crisis rocked the markets.
For the ninth week in a row, investors continued to purchase U.S. stocks, but at a lower level with inflows of only $8.2 billion in stocks and $4.9 billion in bonds.
After receiving a $3 billion boost, cryptocurrency saw its biggest four-week influx ever, reaching $11 billion.
5. Brent is expected to lose money each week.
Concerns about weakening demand after OPEC+ prolonged its current run of supply restrictions until well into 2025 caused oil prices to decline on Friday, with the global benchmark Brent on track for significant weekly losses.
The Brent contract declined 0.4% to $71.77 a barrel by 03:50 ET, while the US crude futures (WTI) fell 0.4% to $68.02 a barrel.
Brent was expected to fall about 1.5% for the week, while WTI held onto slight gains.
The full unwinding of the cuts was postponed by a year until the end of 2026, and the Organization of the Petroleum Exporting Countries and its allies, or OPEC+, postponed the beginning of its oil output rises by three months until April.
The group of leading producers had initially intended to begin undoing cutbacks in October, but it has had to repeatedly postpone the plan due to a slump in global demand, particularly in China.
Additionally, the cartel has consistently lowered its 2024 and 2025 demand growth projections.
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