Employment & Jobs Data Begins to Decline

What’s It Mean:

This week we saw two specific reports citing that jobs in America may finally be softening.

This area has remained the final sticking point for longer-term inflation and the primary concern surrounding the Fed and interest rates.

ADP reported on Wednesday that employers added 177,000 jobs, well below the 200,000 expectations. Furthermore, on Friday while the Bureau of Labor Statistics reported a small uptick in payrolls they reported a 3.8% unemployment rate which is the highest since February 2022.

Why do we care?

On occasion the stock market finds itself in a bizarro world where bad news is actually good. Specifically, this means that weak economic news leads investors to believe that inflation is still coming down and therefore the Fed may not only be done raising rates but setting the stage for cuts in the coming year. This understanding leads to higher markets when in fact economic news is worse than anticipated. A headscratcher I know, but nonetheless the rules by which the game is currently played.

While we too are pleased to see inflation continue its downtrend, we believe the Fed now is walking a very fine line. An economic decline may indicate a soft landing on the horizon however it may also be the start of further acceleration to the downside.

Not a soul knows how this plays out and just when you feel convinced by one argument or another, consider that almost every economist and market prognosticator predicted we’d be in a deep recession by now with stock prices much lower. How wrong they were.

We continue to be optimistic in the face of general pessimism due to the backdrop of this inflationary pressure easing and relatively strong corporate fundamentals.

Quint had the opportunity to sit with the folks from CNBC twice this week to review various stocks reporting earnings. Wednesday’s video can be found HERE while Friday’s video can be found HERE. 

Courts rule in favor of Grayscale over the SEC regarding a Bitcoin ETF

What’s It Mean:

Regardless of opinions or views, Crypto currencies, specifically Bitcoin continue to make inroads into the general investment world. Despite the SEC’s attempt to block Grayscale’s Exchange Traded Fund, the company took their arguments to the courts and prevailed.

In our opinion, this continues to open the door for additional blockchain and Bitcoin investment options further providing credibility that the alternative currency is here to stay.

Why do we care?

We’re more interested in observing the general theme here and trajectory of the Bitcoin currency movement. While we have little concern over the prowess of the US Dollar, and generally scoff at the idea of communist countries unseating King Dollar any time soon, Bitcoin as a viable store of value may one day be the currency that actually does give government manipulated fiat currency a run for their….money. It’s a fascinating development and worth educating yourself on further.

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