NFP data, cryptocurrency madness and hopes for the best

This week can definitely be called the Democratic. Biden is officially recognized as the President of the United States and less than two weeks are left before his inauguration. Senate is controlled by Democrats. Accordingly, the eyes of the markets are again obscured by money. Expectations of cash rain in the form of new stimulus packages are spurred on by the “fear of missing out” and decisively everything is being bought up, from assets in the stock markets to cryptocurrency and commodity ones.

Bitcoin reached 40K, but analysts predict a minimum of 100K. However, we already passed the promises of 100K or even 500K in 2017. Recall that in 2018, instead of the promised of half a million dollars or at least 18K-19K, as it was in December 2017, bitcoin was given a little more than 4K.

The funny thing is that the 80% fall in bitcoin prices was far from the first in its history, but the memory of the cryptocurrency fans is a little longer than that of the goldfish, so you should not be surprised at the current growth or how it will inevitably end. The whole question is only in time.

However, it is in the nature of people to believe in the best. And now, at the peak of the pandemic and lockdowns, which are intensifying and prolonging lockdowns around the world, belief in a quick economic recovery has re-activated. Although, it would seem, spring-summer 2020 showed the economic price of lockdowns. But everyone has already forgotten the drop in US GDP by 30% + in the second quarter of 2020.

In general, we can write a lot about the forgetfulness of the markets. But lets get back to today. Labor market statistics have always been the subject of intense interest from financial markets. Now all attention, of course, will be on the NFP numbers. The indicator has been steadily declining over the past six months, and there is absolutely no reason to expect a break in this trend. That is, the data will almost certainly come out weak with a high probability of going into the negative zone. For the markets, this can be a reminder that things are not as great as they think. Accordingly, today we can witness selloff in the US stock market, but the dollar may well strengthen, riding a panic wave using its safe-haven status.