JOB NUMBERS & INTEREST RATE CUTS

DJIA 52-wk: +23.18% YTD: +18.45% Wkly: -0.60% 

S&P 500 52-wk: +32.27% YTD: +27.68% Wky: +0.96%

NASDAQ 52-wk: +37.88% YTD: +32.30% Wkly: +3.34%

iShares Bitcoin Trust ETF: 52-wk: N/A% YTD: +117.05% Wkly: +4.69%

• The S&P 500 rose by 0.7%, setting fresh record highs as tech and communication services led the rally.
• The Dow Jones Industrial Average climbed by 1.4% for the week.
• The Nasdaq Composite also posted gains, buoyed by a strong performance from AI and technology-related stocks​.

Fidelity Investments Briefing

• A stronger-than-expected U.S. jobs report bolstered investor sentiment.
• Retail sales data and optimism about a potential Federal Reserve rate cut later this month fuelled positive market dynamics​.

Fidelity Investments | J.P. Morgan Asset Management

• Leading sectors included technology, communication services, and energy.
• Sectors such as consumer discretionary, materials, and utilities lagged​.

Fidelity Investments

• Bitcoin reached a significant milestone, crossing $100,000, while altcoins followed with strong gains.
• Gold remained stable after its recent all-time high, and oil prices fluctuated, ending slightly lower for the week​.

Fidelity Investments | J.P. Morgan Asset Management

Overall, the market reflected optimism about economic resilience and favorable monetary policy signals. Looking ahead, investors will monitor upcoming inflation data and corporate earnings for further insights into market direction.

The quiet trading came after the latest jobs report came in mixed enough to strengthen traders’ expectations that the Fed (Federal Reserve) will cut interest rates again at its next meeting in two weeks.

“This print doesn’t kill the holiday spirit and the Fed remains on track to deliver a cut in December”, according to Lindsay Rosner, head of multi-sector investing within Goldman Sachs Asset Management.

Expectations for a series of cuts from the Fed have been a major reason the S&P 500 has set an all-time high 57 times so far this year.

Still, the jobs report may have included some notes of caution for Fed officials underneath the surface.

Scott Wren, senior global market strategist at Wells Fargo Investment Institute, pointed to average wages for workers last month, which were a touch stronger than economists expected. While that’s good news for workers who would always like to make more, it could keep upward pressure on inflation.

“This report tells the Fed that they still need to be careful as sticky housing/shelter/wage data shows that it won’t be easy to engineer meaningfully lower inflation from here in the near term,’’ Wren said.

The latest employment data likely cemented another interest rate reduction by the Fed later this month but did little to clarify the monetary-policy outlook for 2025

To Carl Weinberg, chief economist at High Frequency Economics, the employment data show incomes growing at a healthy, 5% annual clip, the result of payroll growth, hours worked, and average hourly earnings. This may be worrisome to Fed policymakers looking to bring inflation down to their 2% target.

Bitcoin Survives a Flash Crash. Where It Could Be Heading Next.

Bitcoin hit a new all-time high this week.

Bitcoin (BTCUSD -1.91%) was trading lower after a week of ups and downs. After climbing above $100,000 for the first time it dipped as low as $92,000 early Friday and then recovered.

The oldest and largest cryptocurrency was down about 4% from 24 hours ago at $98,868. Other tokens were mixed. Ethereum (ETHUSD -0.76%) was up 2.2%, Solana (SOLUSD +1.39%) fell 1.7%, while Dogecoin (DOGEUSD +4.79%) lost 3.7% and Cardano (ADAUSD -0.82%) retreated 2%.

The drop could have been the result of traders liquidating their positions to lock in profits from the digital asset’s recent rise.

Otherwise, the good news for the industry since Donald Trump was elected president last month just keeps on coming. On Thursday Trump named David Sacks, a venture capitalist who worked with Tesla CEO Elon Musk in the past, as artificial intelligence and cryptocurrency policy chief. Earlier this week, Trump said he’d replace Securities and Exchange Commission Chair Gary Gensler with Paul Atkins, a crypto advocate.

Bitcoin’s climb above $100,000 “was nothing short of remarkable,” said Dilin Wu, a strategist at Pepperstone. “The surge was fueled by a confluence of robust capital inflows and bullish news.”

The monthly nonfarm payrolls report on Friday may provide another catalyst for traders. If the data suggests the Federal Reserve has more room to lower interest rates further, it would fuel a risk-on sentiment and may push digital asset prices higher again.

Crypto bulls are expecting good times to roll on. They see a crypto summer coming, the opposite of the so-called crypto winters when prices fell for a prolonged period in the past.

Traders are betting on an 85 percent probability the Fed will ease its main rate in two weeks according to the CME Group, I’m not so convinced.

Factors I'm focusing on this week:

1) CPI on Wednesday (according to Barron’s, the job report pretty much assumes that November’s CPI, doesn’t surprise to the upside).

2) Price action in KRE, XLF & IWN

3) Price action in NVDA & Semi Stocks

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