Stocks lower on rising risks, Putin talks nuclear, Warnock wins, cryptos decline

US stocks declined as investors fixated over how bad of a recession will hit the US economy and weighed on geopolitical risks. ​ The economy is entering slowdown mode as final Q3 nonfarm productivity data was revised higher and labor costs were significantly revised lower. ​ ​ ​

Yield curve inversion deepens and nears a four-decade low which is clearly setting up this economy for a recession that won’t be a mild one. The US 10-year yield fell 7.1 basis points to 3.46%, with the 2s10s spread falling to -82 basis points.

Putin

Wall Street quickly got unnerved after President Putin said the risk of nuclear war is on the rise. ​ Putin noted that they have the most advanced weapons, but don’t want to wave it around. ​ He claims its own nuclear arsenal as a purely defensive deterrent. Russia is making a clear point that as long as they don’t see an attack on one of their territories, they won’t use nuclear weapons. ​

Politics

The final race for a US senate seat was decided and Senator Raphael Warnock was able to keep his seat after defeating Herschel Walker, a Trump-backed former NFL star, in the Georgia runoff. Surprisingly, this result means every incumbent was able to keep their seat. ​ The Democrats now have a 51 to 49 hold off the Senate, which makes Senator Manchin, the conservative democrat, slightly less powerful. ​ The Republicans did win the House so we still have a divided government. ​

The key takeaway from this election is that Trump-backed Republicans did not do well, so the party may make a strong push to abandon the former President. ​

Crypto

Bitcoin is down as risk appetite fades away on recession worries. ​ Bitcoin has massive resistance at the $17,500 level and that should hold leading up to next week’s FOMC decision. ​ Traders remain nervous about another crypto company going under or for another part of the cryptoverse verse to break. This is the wait-and-see part of crypto trading that has many opting for the sidelines. ​ Crypto could trade in ranges which might support intra-day volumes only. Long-term crypto bets that are waiting to be placed will require either a bullish fundamental trigger or a capitulation moment that has bitcoin testing a key technical level. ​

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