Equites were mixed. The tech mega caps sold off as NVDA disappointed as shares were priced beyond perfection. NVDA ended lower by over 8.5%, a primary catalyst for the 2.8% drop in the NASDAQ. The Dow closed about 0.35% lower.
Treasuries sold off across the spectrum as revised GDP data indicated that the Federal Reserve’s preferred inflation metric—the core personal consumption expenditures price index–climbed by 2.7%, faster than the 2.5% initially reported.
Jobless claims rose the highest level since October, exceeding all forecasts. The pickup in new applications coincides with a number of staff reductions at high profile companies such as Starbucks, META, GOOG, etc.
In Washington DC, applications rose the highest level since March 2023, continuing an uptrend that started at the beginning of the year. Claims in Maryland and Virginia, where there is also a high concentration of federal workers, both fell however.
Claims filed by fired federal workers are generally not included in the overall initial claims numbers and reported separately. But the data would include workers who lost their jobs as contractors and other entities that do business with the government or get federal funding.
The BLS indicated that the number of fired federal workers or contractors is minimal and statistically insignificant.
The dollar rallied again yesterday, the result of yet even more tariff proposals. As written several times, will currency or debt exchange negate the impact of tariffs? Perhaps more significant, will tariff implementation cause a currency or debt crisis, the result of interlocking and interdependent market relationships?
Global crises are typically born in either one of these two markets with perhaps the default of the Thai Bot as the most historical. As historians know, in 1998 Thailand defaulted—a seemingly meaningless event—a default that was the catalyst for the implosion of Long-Term Capital Management (LTCM), an implosion that threatened the integrity of the financial markets.
Next week the all-inclusive BLS Employment report is released. What will it suggest?
Last night the foreign markets were down. London was up 0.24%, Paris down 0.54% and Frankfurt down 0.66%. China was down 1.98%, Japan down 2.88% and Hang Seng down 3.28%. Asian markets were rocked by tariffs.
Dow and NASDAQ futures are up 0.25% and flat, respectively ahead of key inflation report. The 10-year is up 1/32 to yield 4.26%. Bitcoin is down another 7% this morning and is off about 28% from its all-time high achieved less than six weeks ago. Ouch!
