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ADP, Hong Kong's Omicron Scare, Bitcoin $100k? - What's Moving Markets

EconomyJan 05, 2022 06:43AM ET
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© Reuters

By Geoffrey Smith 

Investing.com -- ADP continues the string of important U.S. labor market data releases. Hong Kong takes fright at the spread of Omicron-variant Covid-19, slamming down restrictions on flying and on eating out. Violent protests rock Kazakhstan and Goldman Sachs (NYSE:GS) tells its clients that Bitcoin could hit $100k this year - but there's a big 'if' attached. Here's what you need to know in financial markets on Wednesday, 5th January.

1. ADP job report due

The second of the week’s big labor market releases comes in at 8:15 AM ET (1315 GMT) as payrolls processor ADP publishes its estimate of how many jobs were created in the private sector in the month through mid-December.

Analysts expect a gain of 400,000 jobs, which would be a clear slowdown from the 534,000 recorded in November and the lowest in four months, but still a reasonably strong month on a longer-term historical comparison.

The data come a day after ISM’s monthly survey indicated that hiring dynamics in manufacturing are still strong, while the Labor Department’s JOLTS survey showed vacancies continue to run near record levels, prompting more and more people to quit their jobs in search of better pay.  

The labor market updates continue with jobless claims data on Thursday and the official labor market report on Friday.

2. Hong Kong tightens curbs as Omicron spreads

The Chinese dimension of Omicron risk was in evidence pvernight as Hong Kong suspended restaurant dining and closed its airports to arrivals from North America, Australia, the U.K. and India.

Case rates in Hong Kong have been rising rapidly, and sit uncomfortably with mainland China’s zero-tolerance policy for Covid-19, which has already forced a number of local lockdowns in recent weeks. A city of over 1 million inhabitants was locked down earlier in the week on the basis of only three cases of Omicron, all of them asymptomatic.

Elsewhere, Germany’s Health Minister said that tighter curbs on activity look unavoidable, a day after France and the U.K. chose to try to ride out the current infection wave without any more business closures. U.S. airlines, meanwhile, cancelled another 1,000 flights on Tuesday.

3. Stocks set to open lower as bonds consolidate

U.S. stocks are set to open flat to lower later, consolidating after the initial rally at the start of the week ran into a stiff headwind from the bond market.

Higher long-term interest rates, driven by fears of inflation and the Federal Reserve’s reaction to it, pushed the benchmark 10-Year Treasury yield as high as 1.68% on Tuesday, its highest in five weeks. It too is consolidating around the 1.65% level in the overnight session.

By 6:20 AM ET, Dow Jones futures were flat, while S&P 500 futures were down 0.1% and Nasdaq 100 futures were down 0.4%, continuing to reflect the greater pressure on ‘profitless tech’ and other long-duration bets whose valuations are sensitive to higher discount rates.

Stocks likely to be in focus later include General Motors (NYSE:GM), whose loss of market leadership to Toyota in the U.S. provided a sharp contrast with the surge in rival Ford's share price on Tuesday. Also in the spotlight will be Beyond Meat (NASDAQ:BYND), after an announcement that KFC will give its products a trial run.

4. Ominous fuel-related protests in Kazakhstan turn violent; EIA inventory data due

A wave of protests against the ruling clique rocked the former Soviet country of Kazakhstan in response to surging food and energy prices.

Protesters stormed the office of the mayor in the country’s largest city Almaty, unappeased by the decision on Tuesday by President Kassym-Jomart Tokayev, the hand-picked successor of long-ruling Nursultan Nazarbayev, to dismiss the government and reintroduce a cap on fuel prices.

The protests are an ominous sign of what may lie ahead this year as countries try to normalize economic policy as the pandemic ends, exposing some of the structural problems that have been masked by emergency stimulus policies for the last two years. Caps on fuel prices and household energy bills – and the cost of associated subsidies - are particularly likely to be an issue in Europe this spring.

Prices for crude oil, Kazakhstan’s biggest export, drifted sideways in the overnight session after a mixed report on U.S. inventories from the American Petroleum Institute. Government data are due at 10:30 AM ET as usual.

5. Bitcoin could hit $100k, says Goldman

Bitcoin could hit $100,000 over the next five years, according to analysts at Goldman Sachs.

However, in a note to clients, they say that such a development is dependent on it taking market share from gold in the universe of safe haven assets.

Bitcoin and other cryptocurrencies have traditionally been seen by their supporters as a hedge against the devaluation – sometimes steady, sometimes abrupt – of fiat currencies such as the dollar. But for most of the last couple of years they have traded as momentum assets, increasingly correlated with other risk assets.

The market was unmoved: Bitcoin edged down 0.6% to $46,389, toward the lower end of its range over the last month.

ADP, Hong Kong's Omicron Scare, Bitcoin $100k? - What's Moving Markets
 

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Comments (11)
Grant Hagen
Grant Hagen Jan 07, 2022 7:34AM ET
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Covid will never end, constant mutations. Thats what a virus does. The only thing that will stop it is a cure, not a vaccine
Ron Love
Ron Love Jan 05, 2022 7:58PM ET
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Bitcoin $100K lmao. 2021 taught us crypto is not an inflation hedge.
Niko Niku
Niko Niku Jan 05, 2022 9:46AM ET
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super
jason xx
jason xx Jan 05, 2022 8:53AM ET
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Who says Covid is ending this year? That's wild speculation at best
Ron Love
Ron Love Jan 05, 2022 8:53AM ET
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Correct, they will bring out a new variant every couple months and ride this thing all the way through 2024 elections.
Chad RicherThanYou
Chad RicherThanYou Jan 05, 2022 8:47AM ET
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Bitcoin is literally nothing. nobody cares about omicron either
Gabriel Hull
Gabriel Hull Jan 05, 2022 8:47AM ET
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you are obviously missing out if you are not holding any crypto.
Gabriel Hull
Gabriel Hull Jan 05, 2022 8:47AM ET
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you are obviously missing out if you are not holding any crypto.
Chad RicherThanYou
Chad RicherThanYou Jan 05, 2022 8:47AM ET
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Gabriel Hull bought 3.4 BTC in 2018 and sold it in 2021. The bubble popped move on
mohi eldeeb
mohi eldeeb Jan 05, 2022 7:42AM ET
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Now the governments focus with crypto after they see the ppl makes money they want them just follow the regular stocks “ which they control it “ they dont want us to make money so they start controlling crypto by every possible way
Jack Peterson
Jack Peterson Jan 05, 2022 7:40AM ET
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Where does it all Basil?
Jeffrey Nowakowski
Jeffrey Nowakowski Jan 05, 2022 7:38AM ET
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Bitcoin has bee around for over 12 years and has no practical uses. It has for 2 billion people in China and India. Regulation has been coming out of US at warp speed.Yet Goldman is calling for a million? Lol.
Edward Chong
Edward Chong Jan 05, 2022 7:38AM ET
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Haha i like your no practical uses. cheers !
Matt Kay
Matt Kay Jan 05, 2022 7:23AM ET
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$100,000? why not a million? or a billion? trillion? Thing with no tangible value is worthless.
Four Blue
Four Blue Jan 05, 2022 7:23AM ET
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Btc denominated in USD youre right, it could be, 1 million, 1 billion, 1 trillion per bitcoin. The only money that needs backing are the ones that dont have monetary properties to stand the test of time
Mart Bab
Rubberduck1973 Jan 05, 2022 7:21AM ET
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”Bitcoin could hit $100,000 over the next five years, according to analysts at Goldman Sachs“. How convenient for them. The crypto piramide game went mainstream. And Goldman sacks wants their share. So they buy low and start beating up the drum. I only hope they know, that parking their cash in crypto ain’t helping the real economy in any way now. But then again, they might just not give a *****
 
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