CRYPTO ROLLERCOASTER
Over the past day, the cryptocurrency market has been on a rollercoaster ride, experiencing significant losses totaling over $588 million. Major cryptocurrencies like XRP, Bitcoin, Ethereum, and Dogecoin have all faced drastic price fluctuations, with XRP leading the way in liquidations at $69 million. The market was particularly affected by XRP’s extreme volatility, which caused over $90 million in liquidations within a single day. Bitcoin and Ethereum also saw substantial losses, with $60 million and $57.94 million in liquidations, respectively. Dogecoin, typically known for its stability, surprisingly had $22.5 million in liquidations. Political unrest in South Korea added to the market’s uncertainty, especially on exchanges like Upbit. The dominant player in liquidations was Binance, followed closely by OKX and Bybit. As the market continues to fluctuate and with concerns about potential government actions regarding Bitcoin, investors are navigating through a turbulent period with little clear direction on where prices might go next.
GROWTH SLOWED
According to the latest report from ADP, the job market in November exhibited signs of slowing growth as private companies added 146,000 jobs, falling short of expectations. While sectors like education, health services, construction, and trade saw job gains, manufacturing experienced a setback with a loss of 26,000 positions. Small businesses, those with fewer than 50 employees, also reported a decline in job numbers. Despite the overall slowdown, there was a notable increase in wage growth by 4.8%, marking the fastest rise in 27 months. The performance across industries was mixed, with manufacturing notably weak. This data contrasted with ADP’s count exceeding the Bureau of Labor Services’ October nonfarm payrolls count. Looking ahead, the upcoming BLS report is anticipated to show a growth of 214,000 jobs, following disruptions like the Boeing strike and storms in the Southeast that impacted the previous month’s total.
SEIZING OPPORTUNITY
Potential homebuyers are actively responding to the recent decrease in mortgage rates and an increased availability of homes for sale, which has resulted in a surge in mortgage demand. According to the Mortgage Bankers Association, total mortgage application volume has risen by 2.8% compared to the previous week. The average interest rate for 30-year fixed-rate mortgages has dropped to 6.69%, the lowest level seen in over a month. This favorable rate environment has encouraged a 6% increase in mortgage applications for home purchases, marking the highest level since January. However, refinance applications declined by 1% from the prior week. While conventional refinance applications showed a decrease, FHA and VA refinances rebounded, reflecting varying borrower behaviors.
CALL FOR CAUTION
Federal Reserve Bank of St. Louis President Alberto Musalem is advocating for a more cautious approach to lowering interest rates amidst concerns of elevated inflation levels and a strengthening labor market. While acknowledging the need for continued rate cuts, Musalem emphasizes the importance of patience in order to mitigate the potential risks of excessive rate reductions. He believes that policy flexibility is crucial and suggests the possibility of either slowing down the pace of rate cuts or temporarily halting them to better evaluate the current economic landscape. Despite expressing confidence in the Fed’s progress towards achieving its employment and price stability targets, Musalem remains wary of the uncertainties surrounding future inflation rates and the sustainability of productivity growth. In essence, Musalem’s stance reflects a cautious and deliberative approach to monetary policy, stressing the need for prudence and careful assessment of evolving economic conditions, and investors should keep in mind that there is the possibility that at the next policy meeting, officials may opt for a restrained strategy in view of fluctuating economic data.
POSSIBLE PRICE PLUNGE
Based on a recent survey by law firm Haynes Boone LLP, banks are preparing for a potential scenario where U. S. oil prices could fall below $60 per barrel by the midway point of President-elect Donald Trump’s term. The survey, which involved 26 banks, predicts that the U.S. benchmark, West Texas Intermediate, may drop to $58.62 a barrel by 2027. Trump’s plans to increase shale production could further drive down oil prices, which have already declined by 2.4% this year due to concerns about a global surplus, and it has been highlighted that if prices continue to decrease, producers may need to reduce drilling budgets, potentially resulting in a 10% decrease in drilling rigs in the Permian Basin next year to maintain production levels in this highly active shale region. Nevertheless, it is worth noting that despite pledges from shale producers to restrict growth, as of now, their operational efficiencies are allowing them to produce more while spending less.
