Why the Stock Market Showed a Mixed Reaction to the Great July Jobs Report?

 

On Friday, the U.S. Labor Department reported that 943,000 jobs were added in July, bringing the unemployment rate down to its lowest level since March 2020. The S&P 500 responded to this amazing report with a record intraday high, and the Dow increased 100 points (0.3%). However, the Nasdaq dropped in the red as Treasury yields rose after the excellent job news.

Despite the impressive numbers, many worrywarts believe the labor market is still struggling to recover. In their minds, the Delta variant is a menacing concern, along with the disappointing ADP report on private payrolls, which missed the mark of 700,000 expected jobs by 370,000. Although the ADP report generally runs a different course than the Labor Department report, many investors consider it a good indicator of labor market trends.

This mixed reaction is acceptable for equity investors, who believe a moderate recovery is preferable for all parties concerned. They believe that excessive market enthusiasm will prompt the Federal Reserve to alter its current monetary policy. So, in this case, the doubters serve a useful purpose. Currently, the Federal Reserve has indicated that it is waiting for more positive signs of progress before making any changes. 

To the average investor, this market reaction to the US Department of Labor jobs report signifies an acknowledgment that the economy is improving. Still, investors with diverse viewpoints help prevent it from overheating.

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Takeaways From Amazon Missing Its Revenue Targets

Aug. 5, 2021

It's been a long time is Amazon.com, Inc. (AMZN) fell short of revenue estimates, but it happened last week. As a result, stunned investors pushed the share price down by 7.6% or $120 billion in market value. 

If that wasn't enough, Amazon added to the surprising news by predicting slower sales growth for the third quarter of 2021. While this may be somber news for most investors, others could see these events as the beginning of the end of the pandemic era. As people resume normal activities, overall consumer spending patterns begin to diversify.

This rebalancing of the cyclical and consumer cyclical stocks may make some investors nervous about Amazon's investment viability, but we are talking about Amazon. The company's superhero fundamentals and penchant for innovative change keep core investors in place. Additionally, this company has added nearly 500,000 employees over the past year. Additionally, with the influx of new Amazon Prime members, there is no indication that demand will slow down in the foreseeable future.

Whispers from a Quiet Investor: The Answer to Successful Investing through Cunning Intelligence. Kindle $9.99, Amazon paperback $10.99. 

Why the New SEC Chairman Scares Crypto Investors So Much ?

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 7/3/21

Who's Afraid of Gary Gensler?

Bitcoin's (BTC-USD) price took a dip yesterday as investors recoiled from the mere suggestion of tighter regulations on the cryptocurrency space. The price dip occurred after the newly appointed US Securities and Exchange Commission Chairman, Gary Gensler, expressed the need for more regulation in the cryptocurrency market. 

Since his job is to protect the investor, Gensler's comments should not have surprised anyone. He would target the most speculative investing space today. However, this statement of the obvious sent Bitcoin down 3.8% this morning, nullifying the weekend rally. Ethereum (ETH-USD), Dogecoin (DOGE-USD), and XRP (XRP-USD) had similar price drops.

What's the Big Deal?

Why would many crypto-investors view Gary Gensler as a boogeyman? The answer centers around the core purpose of the cryptocurrency founders: to create a decentralized currency system free of regulatory constraints.  In this context, the SEC represents the cops who come to your house to break up a really rocking pool party. 

Cryptocurrency exchanges have evolved to the point where institutional investors have joined the party. This growing acceptance by big commerce can appear like a double-edged sword — one side can be a catalyst for change, and the other side can cause harm to investors. So, the inevitability of regulator controls is here. The crackdown is already happening around the world. Crypto exchanges such as Binance and Defi have started to comply with new limits on leverage and withdrawals. 

Why Gary's Not So Scary

If crypto investors and exchanges had to choose the top Bitcoin cop, Gary Gensler would be an excellent choice because he is a cryptocurrency expert. In fact, he once taught a class on blockchain technology at the Massachusetts Institute of Technology (MIT). In a recent Bloomberg article, he revealed a method for approving an exchange-traded fund that tracks Bitcoin futures. A crypto ETF would provide a major inroad for cryptocurrency to go mainstream, and Gensler believes it would provide sufficient protection for investors. Since the possibility of Bitcoin ETFs has historically faced SEC resistance, this type of overture from the new SEC chairman should signal to investors that future regulations may be more nuanced than traditional restrictions.  

The Eventual Crypto Outcome

From my decades of following the ebbs and flows of the market, I've seen investors almost always recoil at the slightest sign of negativity before considering all the other factors. We know that cryptocurrency is as much a disruptor to commerce as the internet was to business and society. Still, the thought of governments putting momentum-killing constraints on crypto can cause anxiety. However, like the internet, all parties involved in this space have a vested interest in allowing cryptocurrency to reach its potential. It has the potential to function with emerging technologies like no other medium of exchange. 

Whispers from a Quiet Investor: The Answer to Successful Investing through Cunning Intelligence. Kindle $9.99, Amazon $10.99.