So whats new?!?
Perhaps the biggest headline of the week for our markets was the November Jobs report that was released this morning. In November, the U.S. economy added 227,000 jobs, a strong rebound from October’s revised gain of 36,000, which had been held back by storms and a major labor strike. The unemployment rate edged up to 4.2%, partly due to a drop in the labor force as fewer people were working or looking for jobs. Key job gains came from health care +54,000, leisure and hospitality +53,000, and government +33,000, while retail trade lost 28,000 jobs, likely delayed by the late Thanksgiving holiday. Wages grew 0.4% for the month and 4% year-over-year, slightly above expectations, reflecting steady income growth. Despite the rising unemployment rate, the strong payroll numbers are boosting expectations that the Federal Reserve will likely lower interest rates in December to further support the economy. Our markets are generally reacting positively to the report, with stocks edging higher and Treasury yields falling.
Speaking of the Federal Reserve, Chairman Powell spoke this week at a New Yorks Times event and made some very interesting comments related to Bitcoin and the crypto craze. Bitcoin’s recent surge past $100,000 may have gotten an extra boost from Federal Reserve Chair Jerome Powell’s comments comparing the cryptocurrency to gold. While Powell emphasized that Bitcoin is volatile and not used as a payment method or store of value like the U.S. dollar, he acknowledged its role as a speculative asset, likening it to a digital version of gold. His remarks appear to have added legitimacy to Bitcoin in the eyes of some investors, fueling a 3% rally that pushed its price to $103,000 this week before pulling back. Market strategist Joel Kruger noted that the comparison enhances Bitcoin’s credibility and highlights its growth potential, given gold’s much larger market size. Bitcoin has soared nearly 50% since the Nov. 5 presidential election, bolstered by pro-crypto comments from President-elect Donald Trump and his announcement of Paul Atkins, a crypto advocate, as his nominee for SEC chair. Meanwhile, gold has remained flat since the election but is up nearly 30% for the year. Chairman Powell’s remarks, coupled with political and regulatory developments, have further energized Bitcoin’s meteoric rise to close out the year.
There is a lot to think about here with these comments for sure. With The Federal Reserve set to meet on December 17th – 18th, and another quarter-point cut expected, more commentary should be expected in the weeks ahead. As we wind down towards the end of the year, we are busy processing RMD’s for those required to take them while also preparing for some year-end tax planning as needed. If you find yourself wondering where you might stand on anything specific to your portfolio, please don’t hesitate to reach out.
The holiday season is in full force and hopefully you are getting in some good quality time with family, friends and co-workers. Enjoy and have a wonderful weekend!