Summing Up The Week

The market was holding itself together until mixed earnings from Microsoft (MSFT) and the realization that the U.S. presidential election was mere days away sent stocks reeling on Thursday with the S&P 500 closing down more than 1.5% and the NASDAQ closing down nearly -3%!

Outside of the volatility, the news was mostly good with all indications pointing to both a strong economy and a strong consumer as we head into November.

Let’s look at the news that moved markets this week…

Market News

Consumer Confidence Surges in October

On Tuesday, the Conference Board’s consumer confidence index for October jumped more than 11% to 138, its biggest single-month jump since March 2021, reported CNBC. The index assesses consumer’s perception of the labor market and general business health of the United States.

“Consumers’ assessments of current business conditions turned positive,” said Dana Peterson, the board’s chief economist. “Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data.”

GDP grew at 2.8% in Q3, less than expected

On Wednesday, U.S. Gross Domestic Product (GDP) for Q3 came in at 2.8% versus the estimate for 3.1%, reported CNBC. While missing estimates, GDP above 2.0% is considered above average for a growing economy with the strength attributed to strong consumer spending as well as government outlays.

While inflation has slowed, the cumulative effect of high inflation over the past few years still weighs significantly on consumer sentiment, however. “You’ve got the perfect combination of strong growth and slowing inflation. What more could you want?” said Dan North, Senior Economist at Allianz Trade North America. “But a lot of people want to have lived [in] a less inflationary period [and] that is still hurting them. That’s why they think the economy is still rotten.”

PCE increased to 2.1% in September, as expected

On Thursday, the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred gauge of inflation, showed a slight increase in inflation with a 0.2% monthly increase and a 12-month rate of 2.1%, both in-line with expectations, reported CNBC.

The Fed has long-targeted 2% as their preferred annual rate, so the PCE hasn’t made it to the target, yet, and although September showed a slight increase, this was expected due to the seasonality of the rates. 

On a positive note, the report showed income and spending both held up during September with personal income increasing 0.3% and consumer spending rising 0.5%, both positive figures indicating the economy and consumer both remain strong.

Nonfarm Payrolls increase by 12K vs 100K expected

On Friday, October’s nonfarm payrolls report showed the U.S. economy added 12,000 jobs, far below the Dow Jones estimate for 100,000, reported CNBC. While the reported figure was a significant disappointment, the Bureau of Labor Statistics pointed out that between the Boeing (BA) machinists strike and the hurricanes, the total was likely dramatically reduced.

Pundits were quick to defend the economy despite a jobs report that depicted weakness. “At first glance, October’s jobs report paints a picture of growing fragility in the U.S. labor market, but under the surface is a muddy report roiled by climate and labor disruptions,” said Cory Stahle, an economist at the Indeed Hiring Lab. “While the impacts of these events are real and should not be ignored, they are likely temporary and not a signal of a collapsing job market.”

Next Week’s Gameplan

Big Tech earnings may be out of the way, but we’re nowhere near done with earnings season. I’m watching quite a few key earnings reports next week including Arm Holdings (ARM) and Palantir Technologies (PLTR) for AI on Wednesday and Monday, respectively, as well as other key holdings across my portfolios like Dutch Bros (BROS) and Nutrien (NTR) on Wednesday followed by Cameco (CCJ), Barrick Gold (GOLD), Block (SQ) and DraftKings (DKNG) on Thursday.

There’s no shortage of potential market-moving events, either, with the presidential election on Tuesday, the Federal Reserve rate decision on Thursday, as well as a variety of other economic data points including services ISM & PMI, wholesale inventories, consumer credit, and consumer sentiment.

It promises to be an absolutely crazy week!

When it comes to dramatic market-moving events like the outcome of the presidential election, my strategy is to do all my planning in advance. I’ll spend the weekend reviewing every single one of my positions, making buying and selling plans, and then plugging the next few limit orders into my broker in advance so I’m not tempted to change my mind when the emotional rollercoaster of the market hits us on Wednesday regardless of the direction of the markets.

Hang on to your hats, friends, and then meet me back here next Friday!

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Crytpo Corner

Bitcoin Price Action

Bitcoin’s “Uptober” was REAL!

Turns out that the Bulls were right about October being “Uptober,” a seasonally bullish time of the year for Bitcoin!

Bitcoin charged through all of the upside resistance last week with last week’s weekly high at $69,498.00 standing no chance as the big orange crypto rallied through $70,000.00 as well as the next level resistance at $71974.04 before setting a new weekly and monthly high at $73,624.98 on Wednesday, just a few inches below the all-time high at $73,835.57.

On Thursday, Bitcoin pulled back with the rest of the market and set a much higher weekly-low at $68,750.37, also an incredibly bullish sign.

The Bullish Case

Bulls were cheering Uptober as Bitcoin rallied through all of the Bearish resistance. Some Bulls are predicting Bitcoin will make a new all-time high in the coming days with targets of $87,000 and higher soon. Naturally, the more bullish Bulls believe we’ll see Bitcoin break into the six figures of $100K before the end of 2024.

The Bearish Case

Bears are reeling from the bullish momentum follow-through. Many are warning that we should expect significant volatility and downside price action following the U.S. presidential election if the race comes in too close to call or if Vice President Kalama Harris wins outright. While I do believe we’ll like see volatility, I believe that both former President Donald Trump and Harris see the value of Bitcoin, and I think there are no longer headwinds for Bitcoin stemming from negative regulation heading into the future. Bitcoin’s very much here to stay.

Bitcoin Trade Update

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Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use my Gemini referral link to open an account.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

• In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
• In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
• In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
• Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
• Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
• Later in February, Bitcoin dropped -26% to a low of $43,016.00.
• In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
• In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In September, Bitcoin dropped -22% to a low of $24,900.00.
• In January 2024, Bitcoin rallied +97% to a high of $49,102.29.
• Later in January, Bitcoin dropped -22% to a low of $38,501.00.
• In March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
• In August, Bitcoin dropped -33% to a low of $49,050.01.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.