1. Canada Loses Jobs for a Third Straight Month
This morning, we got the latest jobs numbers from Canada. Statistics Canada reported a loss of 4,700 jobs, while economists were predicting a gain of 14,600.
Keep in mind, this is the third month in a row that Canada has reported job losses. The unemployment rate has risen to 6.7%.
Canada faces a lot of short-term problems, and as this is happening, the Bank of Canada raised interest rates not too long ago. Could anything go wrong?
2. U.S. Jobs Blow Past Expectations: Is a December Hike Back on the Table?
U.S. jobs numbers also came in today, and they were much better than expected. Economists were predicting 65,000 jobs, but the U.S. reported 165,000.
The unemployment rate dropped to 4.1%. August numbers were revised higher by 53,000 jobs, while September was revised higher by 31,000.
This is going to put a December rate hike back on the table.
The U.S. economy is still doing fine overall. Elsewhere in the world, there are problems.
3. The Chip Mania Unwinds as Anthropic’s Valuation Shrinks
Let’s talk about the stock market. We’ve warned about this many times. We said chip stocks and memory stocks were becoming bubble-like, and we were saying this back in June and July.
Nobody was paying attention to valuations. People were more interested in believing this could go on forever. If you read history, you’ll find we’ve seen this sort of thing over and over again. You get a mania-like situation, followed by a mass exit, and that’s what we got.
As we’ve said several times already, AI valuations are being questioned right now. The Anthropic IPO is coming up soon. Will it happen, or will it get shelved?
We’re already getting stories about how investors are skeptical of even a $1.5 trillion valuation. Not too long ago, we were looking at Anthropic going public at $2 trillion.
4. Gold Rejected at $4,100, Silver Hits Resistance at $52
Gold popped after the election result. Yesterday, it held up relatively well as yields came down and the dollar was relatively weaker. This morning, gold is selling off as the U.S. dollar has spiked a little and yields have moved up.
Keep in mind, the $4,000 level on gold is very big, and we’re watching it closely. Gold wasn’t able to cross above $4,100, and that’s something to watch. We were expecting a retest of $4,000 all along, so nothing surprising here. Let’s see what direction it takes.
Silver rejected $52 in a relatively big way yesterday. It will likely retest that level again, and we’ll be watching. The $53 to $55 range is what we’re paying attention to. If silver gets rejected there, it could have more downside.
In the near term, the charts may suggest a little more of a bounce in gold and silver, but you have to be extremely cautious.
5. Bitcoin Slips, the Dollar Bounces, and a Reminder for Investors
Bitcoin has dropped just below $76,000. If it continues to decline, there’s a good chance sellers come in and take it lower.
As mentioned earlier, the U.S. dollar is bouncing, with the dollar index at 102. We’re keeping a close watch on what happens around 102.5. A break above that could mean more upside for the U.S. dollar. With rate hike odds possibly going higher, the dollar could catch a bit more of a bid.
The Canadian budget was announced yesterday. As we’ve said before, there are a lot of near-term problems for Canada, but in the long term, Canada could do all right. The biggest fears are stagnant growth and a highly indebted consumer.
Investing 101: If something is down 50%, it has to go up 100% for you to break even. And 100% moves don’t happen very quickly after something has declined 50%. Just some food for thought.