Scoreboard: Bitcoin boom

Strong jobs data failed to move Wall Street ahead of Thanksgiving but digital currency Bitcoin is seeing some love.

While the Nasdaq (4036), Dow (16,080) and the S&P500 have all pushed through some key levels, and sure, we’re all excited an’ all – it’s not a patch on what we are seeing on the world’s only remaining safe and credible currency.

Bitcoin. Yep, some teenage gamer (or alternatively an organised crime syndicate), sick to death of the rabid insanity griping the world’s major central banking crime syndicates (The Fed, the BoJ , the BoE and the ECB), decided to create – jus’ like that – some artificial unit of currency – and people love it! It pushed through the $1000 mark overnight (an 11 per cent-ish move to a high of $1044 I think). Not bad considering that a couple of months ago it was valued at $140.

Maybe ‘investors’ were too busy watching said unit, cause there wasn’t much happening in the more traditional markets. The Nasdaq had a decent session I guess, up 0.5 per cent and well into 4000 now. Yet the Dow and the S&P500 were basically flat – up nine points and 0.2 per cent, respectively.

Personally I’m a little disappointed in that move. I realise Thanksgiving is coming up and people are winding down but, well, the thing is, there was ample good news to spark a stronger rally. US jobless claims in particular. Since data distortions threw the numbers around a bit, claims have been trending lower, which of course tells us that the US labour market is strengthening.

So for the latest week of data (November 23), claims fell to 316 thousand from 326 thousand – the sixth fall in seven weeks. This is a great outcome and while the early release of the data around the Thanksgiving Holiday may have affected the numbers, the Labor Department isn’t reporting any special factors that influenced the results.

What it’s telling us is that the strong employment gains that we’ve seen will continue, which is why the US 10 year yield shot up 7 bps on the figure to a high of 2.77 per cent. But, and despite these strong gains, we also know that the Fed won’t taper – which is why the 10 year bond yield then fell a bit to 2.74 per cent (up 4 bps from yesterday afternoon).

It should be risk on! Except in commodities. There was no risk on there. Mainly risk off – and just because. You know – the world economy is accelerating and every central bank around the place is printing money – why wouldn’t commodity prices fall? So WTI was down 1.5 per cent ($92.25) although Brent is up 0.3 per cent ($111.4). Copper is then 0.2 per cent weaker and gold is off smalls as well – $1239.

Price moves elsewhere were interesting to the extent that the Australian dollar is at 0.9076 which is about ½ cent lower than yesterday afternoon at 1630 AEDT. Euro is then nearly 20 pips lower, defying an announcement from German Chancellor Angela Merkel that a coalition had been secured with the SPD – assuming the 470,000 members of the party approve it in an upcoming vote. European stocks however pushed higher on the deal – the Dax up 0.7 per cent ,and the CaC up 0.4 per cent.

I should mention there was other economic data out overnight and not all of it was as positive as the jobless claims. But it’s the claims that matter. Durable goods orders fell for instance, down 2 per cent in October although this follows a 4 per cent increase the month prior. Then we saw the Chicago Purchasing managers index fall to 63 in November from 65, while the Chicago Fed national activity index fell to -0.18 from 0.18.

For the day ahead, the SPI points to a very modest lift for our market (0.1 per cent) which isn’t all that exciting, but there is a bit of economic data to keep us entertained. At 1130 AEDT, the ABS releases the capex numbers for the September quarter, with the consensus of forecast for a 1.2 per cent fall. Then again the consensus also expected a modest 0.5 per cent gain for construction work done and this instead came in well above that at 2.7 per cent.

That’s about as exciting as its going to get I suspect, because it is Thanksgiving in the US and markets are closed. Moreover there isn’t much data out – Chinese industrial profits – strong – and then some European data tonight – German unemployment and economic confidence figures for the Eurozone.

Have a great day…

Adam Carr is a leading market economist.

Follow @AdamCarrEcon on Twitter.

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