Market Dynamics Shift Amid Economic Indicators And Rate Cut Expectations
According to BlockBeats, recent data released last Friday indicated that non-farm payrolls exceeded expectations, while the unemployment rate saw a slight increase. This has bolstered the anticipation of a rate cut in December, with market predictions suggesting an 85% likelihood of such a move.
In the past week, technology stocks surged, driving major U.S. stock indices to new highs. The Nasdaq soared over 3%, and the S&P 500 rose nearly 1%, both setting record highs. The Dow Jones was the only index to decline, dropping approximately 0.5%. Meanwhile, the cryptocurrency market experienced significant momentum. Bitcoin spot ETFs saw a net inflow of nearly $2.8 billion over the week, and the market capitalization of stablecoins increased by $3.9653 billion, a growth of 2.56%. This influx of funds pushed Bitcoin past the $100,000 mark and Ethereum over $4,000, with altcoins also seeing substantial gains. Bitcoin is currently consolidating around the $100,000 level, providing opportunities for altcoins.
In the foreign exchange and commodities sectors, the U.S. dollar continued to strengthen last week. Although it initially dipped following the non-farm payroll data release, it ultimately rose by 0.22% over the week. The dollar's rise limited the upward movement of gold prices, but the expectation of a rate cut provided some support, keeping gold prices within a narrow range. Overall market sentiment remained cautious. Oil prices fell for three consecutive days last week due to concerns about oversupply, with U.S. crude down 1.17% and Brent crude down 1% for the week.
Recent data suggests that U.S. progress in combating inflation may be stalling. The Consumer Price Index (CPI) data, set to be released this Wednesday, will be a crucial factor in the Federal Reserve's interest rate decision this month. The market anticipates an 85% chance of a 25 basis point rate cut by the Federal Reserve on December 18. However, expectations for fewer rate cuts next year are gaining traction.
As the year-end approaches, large investment institutions are facing portfolio rebalancing to align with year-end balance sheets and tax considerations. This could lead to short-term liquidity shocks in the U.S. stock market, potentially posing the most significant adverse factor in the near term, and is expected to exert pressure on risk assets.