Equity investors and cryptocurrency traders continue to react negatively to last week’s stronger than expected US Nonfarm Payrolls report. Signs of strength in the US economy have added to speculation that there could be significantly fewer interest rate cuts in the US this year dampening the easy money speculation that had underpinned 2024 gains in many markets. Interest rate speculation may continue through this week’s US inflation reporting which includes producer prices Tuesday and consumer prices on Wednesday
This morning finds US index futures down 0.2% to 1.1% with NASDAQ futures leading the way downward, adding to Friday’s US major index losses of about 1.6%. Over in Europe, the Dax is down 0.8% and the FTSE is down 0.4%. Asia Pacific trading saw losses of 1.0% to 1.5% for Japan, Australia, Hong Kong and India.
With the US 10-year treasury note yield approaching 4.80%, the US Dollar is rallying again, posting gains of 0.8% against the Pound and Gold, and 0.5% against the Euro. With investor confidence fading fast, cryptocurrencies are getting hammered with Bitcoin down 4.1% and Ether down 6.6%. Interestingly, the Canadian Dollar is holding its ground against the greenback today.
Energy commodities are rallying for a second straight day today. New sanctions directed against Russia energy exports has Crude Oil up 1.9% trading near $78.00/bbl. Forecasts of a deep freeze coming for the next few weeks has Natural Gas surging another 4.7%.
Macy’s is down 2.5% in premarket trading after the department store chain announced holiday sales are likely to be reported near or below the low end of previous guidance. Retailers may remain in focus this week with retail sales reports due on Thursday for the US then Friday for China and the UK.
Vaccine producer Moderna is down 19.2% in premarket trading after cutting its 2025 sales guidance. Earnings season gets underway on Wednesday with JPMorgan Chase*, Goldman Sachs*, Wells Fargo, Citigroup, and Blackrock reporting results. More major US banks and financial services companies headline the rest of the week.
* Shares of JPMorgan Chase and Goldman Sachs are held in portfolios managed by SIA Wealth Management.