Summing Up The Week

This week we saw examples of both bad news being good news and good news being good news. First, a private survey in China showed a contraction in their factory activity, potentially showing a slowdown in the global economy. Then, ADP’s payroll report showed an unexpected loss of jobs in November.

While both of those events are not good news for the economy, the weakness in the job market raised hopes for an interest rate cut when the Federal Reserve meets next week. These hopes were raised even higher when the delayed PCE report for September showed lower-than-expected inflation.

So, let’s take a deeper dive into the news that moved markets this week…

Market News

China factory activity unexpectedly contracts

On Sunday, a private survey by Reuters showed that China’s factory activity contracted from 50.5 to 49.9 in November, an unexpected contraction as any figure less than 50 indicates a decrease in activity, reported CNBC. China’s economy is key to keeping global economic activity thriving, so a slowdown in their economy could have impacts throughout the world.

“Manufacturers reduced their workforce and purchasing volume, and became more cautious in inventory management,” said Yao Yu, Founder of Financial Technology company RatingDog, amid a slowdown in new business growth. Yu expects a “weak expansion” in factory activity in December as policymakers work toward the annual growth target of “around 5%.”

November private payrolls fall 32K unexpectedly

On Wednesday, private payroll processor ADP’s November report showed jobs fell unexpectedly by 32,000 with small businesses hit the hardest, reported CNBC.

With worries intensifying over the domestic jobs picture, ADP indicated the issues were worse than anticipated. The payrolls decline marked a sharp step down from October, which saw an upwardly revised gain of 47,000 positions, and was well below the Dow Jones consensus estimate from economists for an increase of 40,000.

While stocks sold off initially, the markets rallied later in the day, likely due to the fact that a worse-than-expected jobs number strengthened expectations for the Federal Reserve to cut interest rates again when they meet later in December.

PCE shows 2.8% inflation in September, lower than expected

On Friday, September’s delayed Personal Consumption Expenditures (PCE) index showed inflation increased 2.8% in September, lower than the estimates for a 2.9% increase, reported CNBC. The core PCE, which doesn’t include food and energy prices due to their volatility, showed a 0.2% monthly rise with a 2.8% annual rate. The monthly rate was in line with the Dow Jones consensus, but the annual level was 0.1 percentage point lower.

When combined with ADP’s decrease in private payrolls, this news caused stocks to rally as the odds for a Federal Reserve interest rate cut next week increased that much more.

Next Week’s Gameplan

While next week is slim on news, there is one key event coming up – the meeting of the Federal Reserve and their decision on interest rates happening Wednesday. There is no question that this will be the big focus of the markets next week as investors have priced in a rate cut. Given the news from ADP employment this week, it does seem likely that the Fed will, indeed, cut. Of course, if the Fed decides to keep rates the same for some reason, next week will get very exciting.

As for earnings, believe it or not, we’re still not done with some of my holdings reporting next week as Gamestop (GME) reports Tuesday after the close and Costco (COST) reports Thursday after the bell. Obviously, Costco could provide integral insights into the American consumer and its effects on the U.S. economy.

Next week will almost definitely be exciting so join me back here as we go over the week’s events, friends!

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Crytpo Corner

Bitcoin Price Action

Last Friday after my article went to “print,” Bitcoin made a new high before rolling over and selling off treacherously on Monday. However, the stalwart crypto was able to make a higher low at $83,800.00 before reversing course. In fact, Bitcoin went on to make a new weekly-high, too, breaking through last week’s resistance at $93,161.86 to set the new weekly-high at $94,181.41.

The Bullish Case

Bulls are hesitant to call this a reversal in the narrative. Bitcoin is only just now challenging the 21-Day Exponential Moving Average (EMA), shown in Blue on the chart, and continues to get rejected. Bitcoin needs to turn each moving average from resistance into support, and this is only the first contender with each proceeding EMA potentially presenting even greater challenges (50D = orange, 100D = red, 200D = black).

The Bearish Case

Bears continue to call for Bitcoin to roll over, test its low, and break through it. Some of the more Bearish believe this selloff is the start of a new Crypto Winter and are calling for a low in the $40Ks. The more notorious Bears are calling for even lower-lows than that, but I’ve found them to be completely off-base in the eight years I’ve been trading Bitcoin – there’s always someone who believes Bitcoin’s going to zero this time around.

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.
• In January 2025, Bitcoin rallied +150% to a new all-time high of $109,358.01.
• In April, Bitcoin dropped -32% to a low of $74,420.69.
• In May, Bitcoin rallied +51% to a new all-time high of $112,000.00.
• In June, Bitcoin dropped -12% to a low of $98,247.01.
• In July, Bitcoin rallied +25% to a new all-time high of $123,231.07.
• In September, Bitcoin dropped -14% to a low of $107,250.00.
• In October, Bitcoin rallied +18% to a new all-time high of $126,296.00.
• In November, Bitcoin dropped -36% to a low of $80,524.65.

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.