November Monthly Macro report

November was supposed to be relaxing; there was minimal economic news, and we were supposed to prepare for the new year. BUT Sam had to be a degenerate and cause a colossal decorrelation between crypto and the world. If Sam had not done this, we would be sitting much higher. Let's review the month of November.

In the US, the Consumer Price Index data was released this month and came below its expectation of 7.9%. It came in at 7.7% and saw great rallies across all markets. We saw our digital assets rally as much as 50% in the crypto markets. In the US equity, it wasn't any different; we saw the S&P 500 rally 5%, and the Nasdaq 100 also rallied about 7.5%. This month the unemployment rate came in at 3.7%, exceeding the consensus of 3.6%. Meanwhile, nonfarm payrolls exceeded the consensus of 200K, coming in at 261K.

After playing the dead reckoning of markets since March, Chairman Powell finally signaled a slower hike sequence would commence in December. However, he managed bullish expectations by restating his commitment to controlling inflation. His statement overshadowed the mixed job data from ADP payroll (127k actual vs. 200k consensus) and JOLTs openings (10.33M actual vs. 10.3M consensuses), leading to a global broad-based rally.

Fed meeting minutes were also released this month, indicating growing favor among members to end significant hikes soon amidst signs of a slowing economy. The minutes suggest a rate hike slowdown could be as early as December or January. Weekly jobless claims were released yesterday, increasing to a 3-month high of 240K vs. a 225K consensus.

In November, China said it reviewed its lockdown measures and could reopen for business by spring 2023. The announcement by the large importer sent oil and copper futures up roughly 2% and 3%, respectively. But towards the end of November, China’s daily Covid infections jumped to nearly the highest on record after the country eased lockdown measures. The new cases have also led to the first virus-related death for the first time in almost six months. Cases have reached concerning high levels, last seen in April at 28,000 cases daily;

These intensified COVID lockdowns that cost lives in China spurred widespread protests across multiple cities. Residents in Urumqi and Shanghai took to the streets while Beijing ground to a halt with elevated measures from policymakers.

China's CSI 300 index has retreated more than 2.5% since last week.

Many people say this could be the start of the bull run because the FED's policy is finally working. They can't pivot yet; inflation is still running at the highs, and what they can do is stop raising with 75bps. At the next FOMC meeting, I expect the FED to raise rates by 50bps.

The collapse of FTX has severely affected the crypto market, and some companies have taken a direct hit. The most notable companies revealed are Genesis, Galaxy Digital, Multicoin Capital, BlockFi, Galois Capital, and Sequoia Capital.

Some companies have taken a hit, but the story is not yet done. More companies will disclose their exposure in the coming weeks, months, and maybe years. Once the tide settles, we will see who was swimming naked.

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