Nov 3, 2023

The U.S. added 150,000 jobs in October versus economist expectations for 180,000 and down from 297,000 in September.

Video transcript

The October Jobs report is out, 100 50,000 jobs were added last month with the unemployment rate little changed at 3.9%. Joining us now to discuss how this data impacts the crypto markets is etoro in us. Investment analyst, Callie Cox. Welcome back, Callie. Hey, good to be here, especially on Jobs Friday. Yeah, that's the only thing happening, of course, as you know, in this, in, in crypto. Um So what, what's your take on, on all of this? Obviously, the, the numbers came were a bit lower than expected. Some of that had to do with uh to be sure that we have the uh strikes in, in the auto industry. We have the strike in the entertainment industry and this is any of that. Uh when, when the fed is looking at the data, they're like, you know what, those are two kind of exogenous, weird things going on. They don't really affect the overall economy. Uh We should keep going on and, and maybe if, if we'll pause for now, but we should look at higher rates in the future. What do you think of that idea? Yeah. So I think overall, you nailed it, Lawrence. This was, this was a report that had a lot more noise than signal. And that's not me tossing it aside and saying it doesn't matter. But you have to look at all of these details in the context of, you know, the fact that we had 50 K workers on strike for the report. And that means that they were tossed out of payrolls. Um They were tossed out of other measures such as, you know, the calculations of the average work week, uh, which could flow into average hourly earnings. Basically, this isn't a report that I would throw away, but I also don't think it's as concerning as it first looks. And if you see the unemployment rate rising, if you see a lower payrolls number, uh, you could jump to the conclusion that we may be in a concerning spot in the labor market. So, what does that mean for interest rates? Yeah, that's a good question. So markets clearly think that means the fed is done for now and that means that rates could level out here, the chance of a higher for longer stance may be lower. Now, uh, I am a little more hesitant to say that's true. I mean, I certainly think the fed has a lot to think about if they want to hike one, by, you know, 25 basis points put in one more hike or, you know, possibly two more hikes. Uh, but at the same time, you know, I think if you see weakening in the job market that presents a pretty good case for the fed to stop here, maybe not cut rates. Um, and even if they do cut rates, maybe let off the brakes a little bit. But, you know, I'm a little worried that the market could jump back into this, uh, you know, rate cuts are coming tomorrow and, you know, rates could go down quickly type of trade. Do you think that that part of that at least was the market in the market are really, really read too deep into that report? They're not looking carefully at the, at the caveats such as the idea of the strikes. I think there's a little bit of that Lawrence. Um, I also think that there, the market is a little more trigger happy these days. Um, we got a really dubish, uh, press conference from Fed Fed chair, Jay Powell on Wednesday. Uh, basically where he wasn't willing to and the Fed never makes promises. Let me be clear about that. But, you know, he wasn't willing to commit to another hike. Um, you know, he dodged questions where he could have been a little more hawkish and, you know, thrown out the idea of a hike. And, you know, most importantly, he's talking about balances being two sided. I mean, the fact that there is a risk to growth here and that tells the market that, you know, the fed may be willing to cut at this point if we see economic data slow down too much. So I wouldn't go so far as to say that cuts are coming tomorrow. Um, or that this jobs report shows that there should be cuts, but the market may be jumping to that conclusion. Let's talk about Bitcoin. Now, we're in November, Bitcoins risen over 100% year to date. Do you think we're out of crypto winter or we still have some, some frost to thaw out? Yeah, that's the question. I wouldn't call it crypto spring just yet. Uh You know, I think it's really encouraging that a we're seeing progress on the industry front. We're seeing a lot of encouraging headlines around the spot, the Bitcoin ETF coming to market soon. Um We're also seeing, you know, more institutional support. We're seeing, you know, the change in tax, uh you know, tax guidelines around how to account for crypto on balance sheets. So there is movement happening in the industry and um in innovation and growth within the space. Uh But Bitcoin is also rallied a lot. Let's be honest, it broke 30 K and basically shot back up to 35 K. So I also wouldn't be shocked to see a little bit of um you know, consolidation for lack of a better word here where uh you see, you know, Bitcoin and crypto investors step back and say, you know, is this really where, uh, Bitcoin and you know, other major coins should be trading right now. All right, be brave two more months left in the year. What do you, where do you think this ends? Ok. I don't make targets but, uh, you know, I think it depends on the headlines we see between now and the end of the year and you know, the move in rates as well because I think crypto is being influenced by both macro and micro factors at the moment. So, you know, if we get a spot, Bitcoin ETF, um I think it will be interesting to see how the market reacts to that. I certainly think some of that news is already priced in, um you know, the crypto market is already accounted for that. But I also think Bitcoin is at an interesting juncture when it comes to the rate story. I mean, if you're a traditional investor, you may see crypto as a risky asset, uh which you know, if rates could go lower, you may be a little more encouraged to invest in Bitcoin. But at the same time, I mean, Bitcoin within the crypto space is seen as the quality asset. So if rates stay high, you know, people on all coins could, you know, rush into Bitcoin as a safe haven. So, you know, I think when you put it all together Lawrence, you could see a, you know, a crypto industry that slowly or keeps rotating into those quality, you know, bigger well known assets. Um You're not seeing it today and I want to remind everybody, we have never seen crypto perform in a systemic recession, only the COVID recession. So it's hard to say K le we're gonna have to leave it there. Thanks so much for joining us this morning. That was it Toro us, investment analyst, Callie Cox.

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