😔 4th consecutive loss

and the EV situation is changing

Author

Morning Download
April 05, 2024

Good morning investors! Yesterday was a mixed bag as BTC recovered and stocks went down (again).

Today we cover:

  • The job situation.

  • No rate cuts?

  • EVs are slowing.

📊 Economy and News 

What to expect from today’s job report

The March nonfarm payrolls count likely will show hiring continuing at a solid pace, though some weakening foundations of the labor market could take greater focus.

Markets will be looking at the composition of the report, signs of inflation and the possibility of more revisions that have lowered initial counts.

Expected today at 8:30 a.m. ET., this report could have a huge impact on the market.

Expected numbers: Job growth is expected to come in at 200,000 for the period. If that’s correct, it will mark a slowdown from February’s initially reported 275,000 but is still a strong pace by historical terms.

What we know so far: Private payrolls increased by 184,000 in March, better than expected. In addition, wages for workers who stayed in their jobs increased 5.1% from a year ago.

Global hits:

Delayed cuts? While most Federal Reserve members have reiterated the consensus that the central bank will reduce interest rates at least three times in 2024, Minneapolis Fed President Neel Kashkari holds a different opinion.

“In March, I had jotted down to rate cuts this year if inflation continues to fall back towards our 2% target. If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all,” he said at a virtual event yesterday.

He found inflation numbers “concerning” and played a major role in sending stocks tanking.

📈 Stocks

S&P 500 5,147.21 (-1.23%)
DJIA 38,596.98 (-1.35%)
NASDAQ 17,878.7813, (-1.55%)
BRENT CRUDE 90.94 (+0.32%)
* Prices as of Apr 5th, 12:20 AM UTC

Dow had its worst day since March 2023

Stock turned red yesterday ending lower for a forth day in a row as investors wait for the March jobs report.

Why? Rising oil prices and concerns that the Federal Reserve might delay interest rate cuts also impacted sentiment.

The day started well but stocks began to fall midday. The Dow, in particular, fluctuated by more than 860 points between its highest and lowest points.

More worries: Crude oil experienced a significant surge, aligning with the downturn in stocks, marking its highest point since October. This worried investors as it could push inflation.

BYD and EVs: BYD plans to launch its first electric pickup truck this year stepping up the Chinese giant’s competition with global auto firms from Ford to Tesla. This news comes a few days after the company reported a fall in delivery numbers, making Tesla the #1 company in the industry (yet again).

Some experts, however, think that EVs will struggle due to poor adaptation, which is linked to a low resale value. Hence, it doesn’t come as a surprise that Ford is delaying all-electric SUV, truck to focus on offering hybrid vehicles across its lineup by 2030.

Bad news: Apple to lay off over 600 California employees after shuttering car project.

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🔐 Crypto

Bitcoin $66,891 (-2.23%)
Ethereum $3,260 (-2.07%)
Total market cap $2.55 (-1.99%)
* Prices as of Apr 5th, 12:20 AM UTC

All about crypto

💵 Personal Finance

What does the Fed do?

The Federal Reserve's mandate is to "promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."

This is known as the "dual mandate."

  • Maximum employment means that the economy is running at its full potential, with everyone who wants to work able to find a job.

  • Stable prices means that inflation is low and stable, so that people's purchasing power is not eroded over time.

  • Moderate long-term interest rates means that interest rates are not too high or too low, so that businesses can borrow money to invest and grow, and consumers can afford to buy homes and cars.

The Federal Reserve uses a variety of tools to achieve its mandate, including:

  • Setting the federal funds rate, which is the interest rate that banks charge each other for overnight loans.

  • Purchasing or selling government bonds, which can affect the amount of money in circulation.

  • Changing reserve requirements, which are the amount of money that banks must keep on deposit at the Federal Reserve.

How does it impact the stock market?

Fed manages interest rates, which impacts the market.

Higher rates result in less borrowing, which slows consumer spending and negatively impacts the growth of companies.

Similarly, lower rates encourage borrowing and allow consumers to spend more, thus helping companies. In addition, higher rates make other investments, such as savings accounts, more attractive, which often forces investors to leave the stock market and look at alternatives.

On the plus side, the Fed typically signals its intentions ahead of time, and comments from Fed executives can impact the market, as we have seen in 2023.

Watch this video for more:

💰 Be a Better Investor

"Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair."

Milton Friedman

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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Disclosure: This is a paid advertisement for American Rebel’s Regulation A Offering. Please read the offering circular at https://invest.americanrebel.com/ for additional information on the company and risk factors related to the offering.