US non-farm payrolls jumped by 312,000; this is 126,000 better than expectations and a great indication the economy may be stronger than analysts expected – which might portend well for stocks in coming months. The only caveat is this could back the Fed into a corner because Jay Powell, the chairman of the Fed, is a hawk. One can only conclude interest rate hikes are very much back on the table after this report.
Stocks rebounded overnight on encouraging news amid news the US & China will hold “vice minister” talks in coming days. The volatility in stocks & bonds is at exceptionally high levels recently due to myriad external forces pushing and pulling all at once. Let’s not forget the government shutdown is yet another factor. My take is the Pelosi-Trump early fawning will lead to a brokered deal by a week from next Monday if not sooner. Both sides realize shutting down 1/6 of the economy is dangerous and they can’t afford to do it much longer. A multi-month government closure could put the economy on a weakened keel; once that gets resolved this will act as another stimulus for the economy – or at least markets will take it that way.
Cryptos meantime are quiet to start the year as global markets have taken center stage.