At 9:30 p.m. Beijing time tonight, the U.S. October nonfarm payrolls data will be released. The market expects 65,000 new jobs and an unemployment rate of 4.2%. Many people are hoping the report will help U.S. stocks stage a dramatic comeback, but I think the logic actually runs in the opposite direction.
First, some context. U.S. stocks just suffered a sharp plunge on November 5, with the Nasdaq losing $2.5 trillion in market value in a single day. The root cause wasn't fundamentals, but overcrowded AI positions. Goldman Sachs data shows that hedge funds sold around $20 billion worth of tech stocks net over two weeks, directly triggering a liquidity-driven sell-off.
The probability of a 25-basis-point rate hike in December has now fallen from 80% to 68.7%. Some of that decline was prompted by the stock market's plunge itself.
The problem is that leading indicators for the U.S. labor market are not weak. ADP reported 86,000 new jobs in October, and initial jobless claims were also low last week. If tonight's payrolls report also comes in well above expectations—for example, at more than 100,000—the chain of “strong data → rising rate-hike expectations → pressure on stocks” will reconnect, and U.S. stocks could end up feeling even worse.
Put simply, for U.S. stocks to rebound, tonight's payrolls report can't be too strong. The ideal result would be moderate: enough to show the economy hasn't collapsed, but not so strong that it pushes rate-hike odds back up.
So the real focus tonight isn't whether the payrolls report is good or bad, but how the market finds a new balance between “economic resilience” and “rate-hike pressure.” In the short term, it's a contest over the data; in the longer term, the tension around rate-hike expectations has yet to ease.
If you'd like to keep following macro developments like these, you can follow me.
$BTC #非农今晚揭晓，美股能否绝地反击？
This is an objective summary of publicly available information and market mechanisms, and does not constitute investment advice. $BNB $NVDAB
First, some context. U.S. stocks just suffered a sharp plunge on November 5, with the Nasdaq losing $2.5 trillion in market value in a single day. The root cause wasn't fundamentals, but overcrowded AI positions. Goldman Sachs data shows that hedge funds sold around $20 billion worth of tech stocks net over two weeks, directly triggering a liquidity-driven sell-off.
The probability of a 25-basis-point rate hike in December has now fallen from 80% to 68.7%. Some of that decline was prompted by the stock market's plunge itself.
The problem is that leading indicators for the U.S. labor market are not weak. ADP reported 86,000 new jobs in October, and initial jobless claims were also low last week. If tonight's payrolls report also comes in well above expectations—for example, at more than 100,000—the chain of “strong data → rising rate-hike expectations → pressure on stocks” will reconnect, and U.S. stocks could end up feeling even worse.
Put simply, for U.S. stocks to rebound, tonight's payrolls report can't be too strong. The ideal result would be moderate: enough to show the economy hasn't collapsed, but not so strong that it pushes rate-hike odds back up.
So the real focus tonight isn't whether the payrolls report is good or bad, but how the market finds a new balance between “economic resilience” and “rate-hike pressure.” In the short term, it's a contest over the data; in the longer term, the tension around rate-hike expectations has yet to ease.
If you'd like to keep following macro developments like these, you can follow me.
$BTC #非农今晚揭晓，美股能否绝地反击？
This is an objective summary of publicly available information and market mechanisms, and does not constitute investment advice. $BNB $NVDAB