Welcome to the weekly UpCrypto Trading Newsletter.
Brief Overview
What does Week 2 bring?
Key economic data like Factory Orders, Nonfarm Payrolls, Unemployment Rate, and Consumer Sentiment are in focus.Weekly Market Wrap:
Investors are analyzing FOMC Minutes and critical labor market data to understand the Federal Reserve’s future monetary policy stance.Earnings Highlights:
Reports from Constellation Brands, Walgreens Boots Alliance, and Delta Air Lines provide insights into the retail, healthcare, and airline industries.
What does Week 2 bring?
Monday, January 6:
Factory Orders 📦
Factory Orders are expected to decline by -0.3%, reflecting ongoing uncertainty in manufacturing. This drop could indicate softer demand in the sector.S&P Global Services PMI Final 📊
The final Services PMI for December is projected at 58.5, signaling robust growth in the services sector. Positive surprises could boost market sentiment.Earnings Reports 📝
Commercial Metals Co. (CMC) will report its earnings, offering insights into the demand for construction materials.
Tuesday, January 7:
JOLTS Job Openings 📈
Job openings are expected at 7.65 million, slightly lower than last month’s 7.744 million. This still indicates a strong labor market.ISM Services Index 📊
An expected reading of 53.5 points to moderate growth in the services sector, which accounts for the majority of U.S. economic activity.
Wednesday, January 8:
ADP Employment Change 👥
A forecast of 143K jobs indicates a slowdown compared to last month. Seasonal factors post-holiday may contribute to this decline.Consumer Credit 💳
A drop to $12.5 billion is expected, down from $19.24 billion. This aligns with typical post-holiday spending trends.FOMC Minutes 🏦
Investors will closely examine the Federal Reserve's meeting minutes for further clues about the path of monetary policy and rate cuts.Earnings Reports 📝
Key reports from Albertsons Companies (ACI) and Jefferies Financial Group (JEF) could impact the consumer markets and financial sector.
Thursday, January 9:
Initial Jobless Claims 📉
Claims are expected to remain stable at 210K, a crucial indicator of labor market health. Surprises could shift market sentiment.Earnings Reports 📝
Companies like Constellation Brands (STZ), Walgreens Boots Alliance (WBA), and KB Home (KBH) will provide updates. Walgreens' results will reflect the healthcare sector, while KB Home will shed light on housing trends.
Friday, January 10:
Nonfarm Payrolls 👥
A forecast of 150K jobs reflects a significant drop from last month’s 227K, signaling potential softening in the labor market.Unemployment Rate 📉
Expected to remain steady at 4.2%, the unemployment rate is a critical metric for the Federal Reserve and markets.University of Michigan Consumer Sentiment 🌡️
A slight improvement to 74.5 is expected, providing insights into consumer confidence and spending intentions.Earnings Reports 📝
Delta Air Lines (DAL) will report earnings, offering a view of recovery trends in travel and aviation.
Weekly Market Wrap before the Outlook
Key Highlights from Week 1:
Chicago PMI Misses Expectations:
The index came in at 42.8, reflecting ongoing contraction in the manufacturing sector amid persistent supply chain challenges.Stable Home Prices:
The S&P/Case-Shiller Home Price Index reported a 4.1% YoY growth for October, demonstrating resilience in the housing market despite elevated mortgage rates.Labor Market Remains Tight:
Initial Jobless Claims stayed within expectations at 223K, indicating continued labor market stability.ISM Manufacturing PMI Stays Weak:
With a reading of 48.3, the manufacturing sector continues to face contractionary pressures, highlighting challenges from high borrowing costs and reduced demand.
Week 1 saw relatively stable markets as investors awaited further signals from the Federal Reserve and key economic indicators.
Crypto and Market Outlook for Week 2
Unemployment Rate in Focus
The unemployment rate is expected to remain steady at 4.2%, a critical signal for the Federal Reserve’s future decisions. Stability here supports the Fed's hawkish stance, but any unexpected rise could introduce volatility across traditional and crypto markets.
Bitcoin Consolidates Around $97K
Bitcoin currently trades near the $97K level, recovering slightly from recent lows. Breaking above the psychological and technical $100K barrier remains crucial. Success could trigger a renewed bullish wave and boost market confidence. However, failure to reclaim $100K could lead to short-term pullbacks.
Altcoins and TOTAL2 Rebound
TOTAL2 (Altcoins excluding Bitcoin) has surged 20% since our buy zone, with many altcoins posting gains of 30-40%. This reflects renewed investor optimism and risk appetite. The challenge now lies in sustaining these gains, particularly if Bitcoin remains below $100K.
Macroeconomic Drivers
Key labor market data on Friday, including Nonfarm Payrolls and the unemployment rate, will be closely watched. A weaker-than-expected report could support further Fed rate cuts, benefiting crypto and traditional markets alike. Conversely, strong data may curb bullish momentum.
Regulatory Developments and Trends
The market continues to monitor global regulatory changes. Clearer crypto legislation, particularly in the U.S., could drive institutional adoption, but restrictive measures might spark short-term volatility.
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Conclusion
Week 2 presents a critical mix of economic data and earnings reports that will shape both traditional and crypto markets.
For Bitcoin, breaking and holding above $100K is vital for sustained bullish momentum.
Altcoins show strong performance, but maintaining current levels depends on broader market trends and Bitcoin’s trajectory.
Labor market data will be pivotal in determining the Federal Reserve’s next steps and influencing market sentiment.
Traders should stay cautious and attentive to macroeconomic developments while positioning themselves for potential opportunities. As always, we’ll keep you informed with updates and insights throughout the week.
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Here's to a successful week, and stay tuned for more weekly outlooks on the crypto and financial markets.
Best regards,
your UpCrypto Team!
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