Jobs Report Backlash

Weekly Market Update from the Office of the CIO


Jobs Report Backlash

Financial markets are still digesting the mixed signals from the latest jobs report released Friday, as well as uncertainty around how the omicron covid variant may affect the economy in the coming months. While November’s unemployment rate notably improved to 4.2% from 4.6% in October, only 210,000 new jobs were added last month, about half of surveyed expectations. Despite muted progress month over month, steady improvement in the labor market continues to trend upward. For reference, the unemployment rate was 6.7% in December 2020, with a pandemic high reached in April 2020 at 14.8%, and over 6 million jobs were added year-to-date.

Fortunately, markets have shown a bit of resiliency today after reports from this past weekend headlines were that omicron is less severe than the delta variant. Equities have recovered from lows seen Friday, while the 10-year Treasury dropped below 1.4% for the first time since mid-September, opening at 1.38% after a Friday low of just below 1.35%.

Bitcoin’s price has stabilized following a dramatic selloff to the low $40k’s late Friday night after almost two weeks of trading in the upper $50k range. Current price support, defined by the 100-day moving average at $54.5k, could not stop the swift decline despite recent recoveries at that level. Current pricing range could be between $45k and $50k in the short term, excluding any unexpected strategy moves from some of the larger market participants. There’s also strong anecdotal evidence that long term bitcoin investors are increasing their BTC exposure at these levels, with El Salvador already buying 150 units at an average price of $48.6k over the weekend.

On-Chain Outlook

Looking at longer-term bitcoin holder behavior on-chain, demand softened throughout last week. Long-term holders have sold slightly, but nothing compared to the strong bearish sell-off leading into summer. Price was driven lower by spot selling on Saturday that led to more emphatic cascading liquidations on many futures and derivative platforms, which has now flushed open interest and reset funding rates. Overall, on-chain demand is currently neutral while addresses holding less than 1 BTC and speculators have continued to accumulate, signaling the possibility of a swift recovery.

Valkyrie in the Press

The Portfolio Management Team

Steven McClurg, CIO
Bill Cannon, Portfolio Manager
Wes Cowan, Portfolio Manager, Head of Defi
Sean Rooney, Head of Research, Trader
Will McDonough, Vice Chairman, Investment Committee
Leah Wald, CEO, Investment Committee
Shannon Smith, Head of Investor Relations