Today’s Price Action:
*Bitcoin and Ethereum saw sharp declines in the past 24 hours, with heavy trading volume and strong selling pressure driving the move. Technical indicators for both cryptos point to a bearish outlook, as prices are trading well below key moving averages and deep into oversold territory. While a short-term rebound is possible, the broader market trend remains firmly bearish.
Friday
*Federal Reserve Bank of New York President John Williams stated that it is now appropriate for the central bank to lower interest rates due to progress in reducing inflation and a cooling labor market.
*Fed Governor Christopher Waller also emphasized the need for the US central bank to start cutting rates this month, citing increasing risks of further weakening in the labor market.
*Stocks took a hit from a tech selloff, while bonds rose during a volatile session after a mixed jobs report left traders uncertain about the possibility of a large rate cut from the Federal Reserve in September. Wall Street’s bets on a half-point cut this month faded after briefly gaining traction when Waller said he’s “open-minded” about a bigger reduction. Most traders agree the labor market is softening but not enough to justify a drastic move from the Fed at this point.
*Bitcoin hit a one-month low on Friday, with market sentiment turning to “extreme fear.”
Thursday
*Bold bets by Citigroup and JPMorgan that the Federal Reserve will cut interest rates by half a percentage point this month are facing a major test with Friday’s US jobs report.
*Stocks erased earlier gains as traders processed mixed economic data ahead of the report. The S&P 500 fell for a third consecutive day, even as tech giants rallied. Treasury yields remained steady, with markets pricing in over 100 basis points of rate cuts by the Federal Reserve in 2024, hinting at a large reduction before year-end. Oil prices rose after OPEC+ agreed to delay its planned crude production increase by two months.
*US companies added the fewest jobs last month since early 2021, further indicating a cooling labor market.
*Meanwhile, the crypto market experienced renewed volatility, with a mid-week sell-off dragging the total market cap below $2 trillion, underscoring the sector’s sensitivity to broader economic factors.
Wednesday
*US job openings dropped in July to their lowest level since early 2021, while layoffs increased, reflecting a cooling demand for workers. Vacancies fell to 7.67 million, missing all forecasts, and layoffs rose to 1.76 million, the highest since March 2023.
*Nvidia’s market value plummeted by a record $279 billion on Tuesday, prompting traders to analyze charts for signs of a bottom. The stock has declined 14% over the past three sessions, with few catalysts expected post-earnings.
*Treasury yields fell sharply after data indicated a further slowdown in the US labor market, fueling Wall Street’s expectations for Federal Reserve rate cuts. The bond market reacted swiftly, with yields dropping across the curve, particularly in shorter maturities. Fed swaps now price in over 100 basis points of policy easing by year-end, including a significant cut.
*Bitcoin neared a one-month low as investors retreated from riskier assets amid concerns about the global economic outlook.
Tuesday
*A selloff in major tech stocks weighed on the market as it kicked off a traditionally challenging month, with traders preparing for a series of reports that will shed light on the state of the U.S. economy.
*Following a rally that brought the S&P 500 near its record highs, Wall Street traders began to reduce risk. U.S. manufacturing activity contracted in August for the fifth consecutive month, with sharper declines in orders and production. This data sets the stage for a busy week of economic releases, culminating in the crucial jobs report on Friday.
*Oil prices plunged, wiping out their gains for the year, after a deal to restore Libyan supplies shifted focus back to concerns over weak global demand.
*Citadel Securities and Jane Street Group LLC, two of the leading U.S. market-making firms, are on pace to achieve record annual revenues as they continue to challenge big banks’ dominance in trading.
*The perpetrator of India’s largest crypto hack has started laundering some of the $234 million stolen from the WazirX exchange, acting on the same day the platform detailed its efforts to recover the funds.
