The following content comes from X KOL @Phyrex_Ni
At 22:00 on Wednesday evening Beijing time, the U.S. Bureau of Labor Statistics will release the preliminary report on nonfarm employment and payrolls (QCEW) for the first quarter of 2024. The current market view is that the Bureau of Labor Statistics will significantly lower the number of employed people. If this really happens, it will not be a good thing and may increase market expectations of a recession.
Possible downside: If the employment data is revised down significantly, it may trigger market concerns about the health of the US economy. Investors may reassess the growth prospects of the US economy. At this time, defensive assets (such as utilities and consumer staples, and even AI) may perform better, while economically sensitive sectors (such as financials and industrials) may perform poorly.
As for cryptocurrencies: Although we all know that the U.S. dollar index and cryptocurrencies are inversely proportional, the decline of the U.S. dollar index is often linked to interest rates. For example, we can clearly see that the U.S. dollar index has fallen sharply in the past two days, but #BTC has not seen a sharp rise. This is because the market's expectations for interest rate cuts are more inclined to indicate economic problems. This is why it is said that a 25 basis point interest rate cut in September may be a positive, while a 50 basis point interest rate cut may be a negative.
The essence of the matter is whether an economic recession is part of the deal.
Let me come back to the topic of something I heard at the dinner party, which has nothing to do with gossip.
First of all, my friends in private banking expect that the Federal Reserve may cut interest rates by about 125 basis points, while my friends in traditional banking believe that the cut will be 75 basis points. Therefore, the dot plot in September is very important. If there are three cuts, it is basically certain that the rate will be at least 75. However, the greater the frequency of rate cuts, the greater the risk.
Why do I say this? Because as the U.S. Bureau of Labor Statistics expects a downward revision of employment data, the unemployment rate will increase, and the probability of a recession will rise. Although the current GDP and retail data do not support a recession, as long as the unemployment rate rises, a recession is likely to occur again. At this time, a sharp interest rate cut means that the Federal Reserve is aware of the possibility of a recession and is trying to control it by cutting interest rates.
Therefore, our friends at the bank believe that when interest rates are cut, there will be a “fall first and then a rise”, transitioning from a trading recession to economic stability.
From our perspective, the September rate cut is almost 100%, and after September is the US election. It is very likely that the market will perform well during the election, and the trend is also in line with the "later rise" market. However, whether it will fall first depends on how the trading recession game works. The most critical point here is the unemployment rate. The interest rate meeting will be on September 19, and the August non-agricultural data will be released in early September. In addition, the August retail data will also be released before that. On the contrary, the importance of CPI and PPI will be lower.
Secondly, the bigwigs in the mining circle hold a relatively pessimistic view on individual mining. One is the rising cost of mining in the United States. It is already difficult to make money by mining in the United States, and the payback period is lengthened. Mining outside the United States will have political and electricity price problems, but these are not the most important. The most important point is that with the entry of a large number of institutions, the space for individual mining is gradually being compressed. Especially when institutions enter the market, fundraising becomes very easy, while individuals are actually investing their own money.
But this does not mean that private mining cannot make money. If you look at it from a long-term perspective, private mining can still bring very good returns, but all of this is based on a long enough period of time.
Finally, the big guys have a unanimous view that it is easier to make money in a big cycle. What is more important for investment is to identify the "head" assets. The more large institutions like BlackRock, Fidelity, Invesco, and Franklin Templeton there are, the higher the probability of success will be. In other words, follow the big capital. You may not make a lot of money, but it is relatively easy to earn a stable income.
And PVP is the most difficult part.
