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Markets are settling into holiday mode, with stock futures slightly down on the last full trading day before Christmas. Here’s where things stand today: * Nasdaq-100: +0.37% * S&P 500: +0.04% (flat) * Dow Jones: -0.22% On Friday, the S&P 500 rose 1.1%, recovering
Quantum computing stocks are taking off in 2024. Is this the start of something big? Let’s take a closer look Google’s Chip Changes the Game Google’s new Willow chip, a 105-qubit processor, hit a big milestone: * Fixed Errors: It solved a 30-year problem by cutting down error
Government surveys that track the economy are failing. Budgets are shrinking, people are skipping surveys, and economic data we rely on is becoming less trustworthy. This is a big deal—because when the numbers are wrong, decisions that affect markets, businesses, and everyday life go wrong, too. Here’s what’
The S&P 500 Value Index just dropped 3.7%, marking its longest losing streak on record. Meanwhile, Bitcoin smashed past the $100,000 mark, and the Nasdaq climbed to 20,000. To me, it seems that value stocks have been left in the dust, and investors chasing bigger
Almost $10 billion has poured into Bitcoin ETFs since the US election, pushing Bitcoin past the $100,000 mark for the first time. The momentum is crazy, with Bitcoin posting its best winning streak since 2021. With investors pouring in, knowing the risks are more important than ever. Bitcoin’s
Today's job report just dropped, smashing expectations. Markets are reacting, rate expectations are shifting, and now the big question is: will this job surge lead to more inflation?
Futures, Volatility, and the Aftermath
As of 8:45am CST, markets were clearly pleased with the news. The S&P 500 jumped 0.72%, the Dow Jones gained 0.62%, the NASDAQ climbed 1.15%, and the Russell 2000 took the lead with a 1.47% spike. Small caps especially loved this report—probably because they're the first to take a hit in a recession, and the job numbers hint that a recession might not be soon.
The Volatility Index (VIX) also dropped, falling 6% as traders seemed to relax—at least a little. It's worth noting, though, that the VIX is still higher compared to past months, partly due to other recent events, like the ongoing conflict between Iran and Israel. But for now, investors turned their attention back to economic data, with everyone more interested in the strong labor market than in geopolitics.
Shift in Fed Funds Rate Expectations
The strong jobs report caused a major shake-up in Fed Funds Futures. Before these payroll numbers came out, everyone was excited for a 50 basis point rate cut at the upcoming meeting. But after today's data hit, expectations swung sharply towards a smaller 25 basis point cut, with a huge 91% chance of that smaller move now priced in.
This isn't just about interest rates—it affects everything. A smaller cut is less aggressive, which implies that the Fed thinks the economy is doing fine but still wants to tread carefully. This shift has big impacts on bond yields, mortgage rates, and especially stock valuations, with rate-sensitive sectors like tech feeling the most impact.
Will This Job Growth Create Inflation?
The strong job market is great news for workers—more jobs, higher wages, more spending. But that can also mean rising prices, which is exactly what the Fed wants to keep under control.
More people working and spending could add upward pressure on prices. The market seems comfortable with a smaller rate cut for now, but if this job growth keeps pushing wages and spending higher, the Fed might have to rethink things sooner than expected.
So, the real question is: will this job growth be too much of a good thing and make inflation a problem again? For now, we’re in wait-and-see mode. Traders are betting that the Fed can keep things calm, but if inflation creeps back up, that might change fast.