The bottom is a ways away, claims data off lows, crypto anchored around $20k

US stocks bounced around on payrolls eve, digesting another round of hawkish Fed speak. ​ Minneapolis Fed President Neel Kashkari signaled there is no Fed pivot coming until financial conditions worsen significantly from here. Kashkari said the Fed will keep hiking rates to bring inflation and that they are “quite a ways away” from pausing their tightening cycle. Earlier this week, Fed’s Mester, Bostic, and Daly stood united in a very hawkish stance that will push back on some of the market moves positioning for a Fed pivot.

It looks like Wall Street is already looking ahead to next week’s inflation data. ​ Economists are not expecting a significant drop in pricing pressures, but many traders think that a cool report could happen and that will force the Fed to change their tune next week.

Fed messaging has been consistent and it will likely stay that way post-NFP. ​ Rate hike and cut bets will likely have significant swings after next Thursday’s inflation report.

US Data

US jobless claims rose from five-month lows but still supports the idea that the labor market remains strong. ​ Applications for unemployment insurance rose by 29,000 to 219,000 in the week ended October 1^st, higher than the consensus estimate of 204,000, also snapping a 10-week streak of coming in below economist expectations.

Signs that the labor market is quickly cooling will come from Corporate America. This upcoming earnings season will give us a clear understanding of how quickly this economy is going to weaken. Signs are emerging that it will be filled with hiring freezes/layoff announcements and declining investments in both CAPEX and acquisitions. ​

Reportedly GE is going to reduce its US onshore wind workforce by 20%. Job losses will likely remain steady as the inflation story of rising input costs and supply chain issues will force many companies to cut costs. ​ Given the global energy crisis, this report that GE is going to cut hundreds of jobs in its onshore wind power group is troubling.

Crypto

Bitcoin appears to be consolidating around the $20,000 level as much of Wall Street awaits Friday’s nonfarm payroll report. Much of the crypto headlines focus on the recent woes for the space, but are not containing any new bearish catalyst. ​ Bitcoin’s next major move will likely be determined on what is the next major move with rates and we will find that out tomorrow morning.

Much of the crypto world is following the latest developments with Terra Founder Do Kwon’s crypto assets. ​ News1 Korea reported that prosecutors froze $40 million in assets. The terraUSD collapse and the death of Luna is one of the key stories of the year and a key catalyst to the last part of the crypto plunge this year. The cryptoverse needs to move beyond anything Terra related and once this story is off the radar, that will allow for the focus to shift back on more positive crypto drivers. ​ ​ ​

Another key crypto story for today involves Celsius. ​ Celsius co-found Daniel Leon resigns as the crypto lender tries its footing post bankruptcy. ​ Celsius is trying to find a new way to bring its business back to life with new crypto tokens. ​ ​

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