After the sharp decline on Thursday, the three major U.S. stock indexes rebounded on Friday. The non-farm payroll numbers came in unexpectedly low, leading the market to estimate that the Federal Reserve will cut interest rates by 25 basis points at its meeting next week. Additionally, the approaching U.S. presidential election adds more uncertainty to the market.
Non-farm payrolls disappoint, will the Federal Reserve definitely cut rates next week?
The non-farm payroll data for October released on Friday showed a disappointing increase of only 12,000 jobs, significantly below the market expectation of 100,000, marking the smallest increase since December 2020, impacted by recent hurricanes and strike activities. According to the CME FedWatch Index, traders widely believe that the Federal Reserve will cut interest rates by 25 basis points at its rate decision meeting on November 7.
Bitcoin retreats to 69K, is Mt. Gox redistributing to creditors?
Bitcoin attempted to challenge its historical high at the end of October, briefly reaching $73,620, just a step away from this year’s peak of $73,777. According to a tweet from the on-chain data company Arkham, the once-largest cryptocurrency exchange, Mt. Gox, sent 500 bitcoins worth approximately $35 million to two unmarked wallets last night, marking its first transfer since September and raising market fears of selling pressure on Bitcoin.
Due to the wallets being unmarked, it is currently unclear whether these transfers are part of a future distribution to Mt. Gox creditors. Nevertheless, past actions of this kind have typically occurred before repayments through distributors such as cryptocurrency exchanges Bitstamp and Kraken. According to Arkham, Mt. Gox still holds 44,878 bitcoins, valued at over $3.1 billion. However, in mid-October, Mt. Gox again postponed the deadline for repaying assets to creditors from the originally scheduled October 31, 2024, to October 31, 2025.
Important events next week
Warren Buffett’s Berkshire Hathaway (BRK) will release its earnings report on Saturday. The U.S. presidential election is approaching on November 5, with current polls showing a tug-of-war. Analysts believe that if the election becomes deadlocked, the results may be delayed until after the Federal Reserve meeting, adding more uncertainty to the market.
The former AI darling Supermicro (SMCI) will also report earnings on November 5, while Ernst & Young, the firm responsible for its audit, recently announced its resignation, causing the company’s stock price to drop 45% last week. The Federal Reserve will announce its rate decision on November 7, following a significant rate cut of 200 basis points in September, the first rate cut since the onset of the pandemic. The market generally believes that the Federal Reserve will maintain a gradual rate-cutting pace, leading the U.S. towards a soft landing or even no landing.