💥 NFP Shock?: Manufacturing Trembles as Jobs Report Approaches

Good Morning!

The financial world's got a case of the September blues. U.S. and European futures are looking grim, while Asian markets are having their worst day since early August. What's behind this mayhem? A cocktail of global growth jitters and a sudden hiccup in the AI party. The usual suspects are at play - lackluster U.S. manufacturing data, China's economic wobbles, and Nvidia's record-breaking stock plunge. Oil's not faring any better, tumbling to nine-month lows. All eyes are now on the upcoming U.S. jobs report, which could make or break the Fed's next move.

In today’s email:

• Fed Watch: Manufacturing continues to struggle

• Bitcoin: September bites, Bitcoin now below $57k

• NVDA: $279 Billion market value in a day!

• Goldman Sachs: is bullish on gold 🚀

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THE BIG IDEA

U.S. manufacturing sector continues to struggle, with a slight improvement in August masking underlying weaknesses

The factory floor's looking a bit gloomy. August's manufacturing PMI inched up to 47.2, but don't break out the champagne just yet. We're still in contraction territory for the fifth straight month, and the devil's in the details.

New orders? Down. Production? Slumping. It's like watching a game of economic limbo - how low can we go? But here's the kicker: despite the slowdown, manufacturers are shelling out more for inputs. Talk about adding insult to injury.

Now, before you start building that economic bunker, remember that these surveys tend to paint a darker picture than reality. The Fed's still eyeing a rate cut this month, and nobody's hitting the panic button... yet.

But let's not sugarcoat it

Chemical products are feeling the chill, machinery orders are as sluggish as a Monday morning, and don't even get me started on construction spending. It's down 0.3%, with single-family homebuilding taking a nosedive. Blame it on those pesky mortgage rates and the inventory hangover.

On the bright side, five industries are still growing, including our tech-savvy friends in computers and electronics. And some sectors are running overtime just to keep up. It's a mixed bag, to say the least.

The big question now? How will this manufacturing malaise play out in the job market? We're all waiting with bated breath for Friday's employment report. Until then, keep your economic seatbelts fastened. This ride's far from over.

MARKETS AT A GLANCE

TOP NEWS

Nvidia's record-breaking $279 billion market value loss signals a shift in AI investment sentiment

The AI party's hangover has hit, and Nvidia's feeling it hard. The chip giant just hemorrhaged a jaw-dropping $279 billion in market value - the biggest one-day drop for any U.S. company. Ever. What's behind this tech tremor? A potent mix of sky-high expectations, tepid forecasts, and investors sobering up to the realities of AI investments. The entire chip sector felt the aftershocks, with the PHLX index taking its worst beating since 2020. Is this the end of the AI gold rush? Not quite, but it's a wake-up call. The tech world's learning that even in the land of ones and zeros, what goes up must come down.

Investors cautiously eye tech stock dips amid Nvidia-led selloff, weighing risks and opportunities

Is this a chance to snag some bargains or a sign to batten down the hatches? The VIX Index, known as Wall Street’s “fear gauge,” spiked on Tuesday, and there are more sources of potential volatility to come this week. They include the closely watched US jobs report on Friday. Analysts are split. Some see a buying opportunity, betting on AI's long game. Others are waving caution flags, eyeing Friday's U.S. jobs report like it's the season finale of "Tech Stocks: The Series." One thing's clear: September's living up to its reputation as the market's moodiest month.

Oil prices tumble on Libya production restart and OPEC+ output increase plans

The black gold's losing its shine. Oil prices are sliding faster than a greased pig, with Brent and WTI both taking a nosedive. Why? Libya's oil fields are firing up again, and OPEC+'s planning to turn up the taps. China's economic hiccups aren't helping either. With the world's top oil importer stumbling, demand's looking as shaky as a house of cards.

CRYPTO

Bitcoin nears one-month low as economic fears spark risk-off sentiment

Bitcoin's flirting with a one-month low, down over 4% as economic jitters spook investors. The crypto market's caught in the crossfire of global market woes, with all eyes on Friday's U.S. jobs report. Options traders are hedging their bets, bracing for potential post-payroll dips and election uncertainty. September's historically rough for Bitcoin - could we see more storm clouds ahead?

Trump’s new crypto project, World Liberty Financial, is marred by controversy and questions over its team’s past

Donald Trump’s crypto initiative, World Liberty Financial, promotes decentralized finance (DeFi) but faces scrutiny due to its leadership. Four team members, previously involved in Dough Finance—a platform hacked for $2 million—are now linked to Trump’s project, which also involves his sons as “Web3 Ambassadors.” The project aims to launch a governance token, WLFI, but concerns arise over its resemblance to Dough Finance and the controversial backgrounds of team members. Despite this, Trump pushes for a pro-crypto stance ahead of the 2024 election, signaling a pivot from his previous skepticism toward digital assets.

Ethereum's profitable addresses have fallen sharply amid ongoing bearish market trends

The percentage of Ethereum addresses in profit has dropped to 65% as of September 3, down from a high of nearly 90% in March 2024. This mirrors past market downturns, such as in late 2018 and early 2020, when profitability dipped significantly. As bearish pressure persists, Ethereum's address profitability may decline further, reflecting cautious market sentiment.

Ripple CEO Brad Garlinghouse reveals plans for a new stablecoin and criticizes the SEC's regulatory stance

Ripple is set to launch its U.S. dollar-pegged stablecoin, RLUSD, within weeks, according to CEO Brad Garlinghouse. At Korea Blockchain Week, Garlinghouse criticized SEC Chair Gary Gensler's approach to crypto regulation and ruled out a U.S. IPO for Ripple. He remains optimistic about the crypto industry's future, predicting more favorable U.S. regulations post-election. Garlinghouse also called the SEC’s enforcement against OpenSea "unfortunate."

GOLD

Goldman Sachs favors gold over other commodities as China weakens demand

Goldman Sachs is bullish on gold, predicting a price target of $2,700 by early 2025 due to its role as a risk hedge amid expected Fed rate cuts. The bank is less optimistic about other commodities, citing weak demand from China. It revised its 2025 targets lower for oil, gas, copper, and aluminum, while suspending zinc coverage and maintaining a bearish outlook on nickel.

DAILY ECONOMIC CALENDAR (ET)

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