Global stocks look set to snap an impressive winning streak—crypto falters

Happy Friday, Bull Sheeters.

Global stocks and U.S. futures look set to end the week on a high note. Barring a big rally, however, the major averages in the U.S. are on pace to snap a five-week winning streak.

It’s been an impressive run, but we’re now beginning to see inflation worries buffet stock portfolios. On cue, bond yields are inching up this morning.

Meanwhile, the crypto board is awash in red, with Bitcoin and Ethereum’s Ether under pressure.

In today’s “By the Numbers” I look at what’s puzzling economists about the labor market and latest batch of inflation data.

But first, let’s see what else is moving markets as we close out the trading week.

Markets update


  • The major Asian exchanges finished mostly higher, with the Nikkei closing up 1.1%.
  • First it was General Electric, now it’s Toshiba‘s turn. The Japanese conglomerate on Friday announced it will split into three core operations, news that pushed the stock up nearly 1%.
  • Inflation hawks, here’s more unsettling news. Consumers in Japan and China are experiencing some of the wackiest price-rises in the developed world. In Japan, inflation just hit 8%, a 40-year high.


  • The European bourses were mixed mid-morning the Stoxx Europe 600 off 0.1%. On Thursday, Germany’s DAX, France’s CAC and the benchmark Stoxx 600 all hit fresh records.
  • Energy traders are closely watching the EU’s eastern border. As part of a border dispute with Poland, Belarus has threatened to curtail gas supplies to the bloc where energy prices have already been extremely volatile.
  • Meanwhile, Russia may be planning to invade Ukraine, U.S. intelligence officials warn.
  • Geopolitical concerns plus inflation fears are driving down the euro.


  • U.S. futures are up slightly, but barring a major rebound the S&P 500 will finish the week in the red. On Thursday, tech stocks were the big winners with Nasdaq climbing 81.58 points.
  • Bonds resume trading today (after yesterday’s Veteran’s Day holiday), and the yield on the 10-year Treasury is already up a tick.
  • After Wednesday’s shock inflation report, today we get more insight into consumers’ hopes and fears. The closely watched University of Michigan consumer sentiment report comes out shortly after the opening bell.
  • Correction: There was an error in yesterday’s Bull Sheet about the size of the Tesla stock slump earlier in the week. It should have read that the EV maker’s market cap shrunk by $200 billion, and, during that swoon, Elon Musk saw a 15% hit to his paper wealth.


  • Gold is down, but it’s had a good week. It trades above $1,850.
  • The dollar is up.
  • Crude is off. Brent trades around $82/barrel, or flat over the past seven days.
  • Crypto is lower. Bitcoin is down 1%, trading below $65,000.


By the numbers


By Goldman Sachs’ count, 5 million Americans have dropped out of the workforce, obscuring what looks like an otherwise stellar unemployment rate of 4.6%. The labor participation rate has been pretty lousy since the summer of 2020. Goldman forecasts that vital participation metric will sit at 61.9% at year-end. This number has been falling for years, even before the pandemic. But what’s stunning (and baffling) a lot of economists is that the participation rate continues to plunge despite abundant job openings and rising wages. A whole swirl of factors are keeping “prime-age” Americans on the sidelines of the labor market: COVID, child-care constraints and excess savings are big factors. There are about 1.7 million Americans who fall in that category of prime-working age, Goldman says. The good news for employers is that the COVID-related labor-supply drags will ease and, it is believed, these fit Americans will go back to work. The bad news: some of these shifts in the labor market are permanent. “Changing lifestyle and work preferences may prompt some workers to voluntarily remain out of the labor force for longer, provided they can afford to do so,” Goldman writes. Glad I don’t work in HR.


Economists continue to comb over Wednesday’s CPI report to glean where exactly inflationary pressures are biting the hardest. A refresher: the official number shows a 6.2% price-rise year-on-year, a 30-year high, and well above the Federal Reserve’s stated goal of around 2%. Economists are not buying the Fed’s main take that this is a soon-to-pass trend. And Berenberg chief economist Mickey Levy isn’t buying the explanation that shocks in a few sectors like autos is the culprit. “Our analysis of more than 200 components of the CPI shows clearly that the distribution of price increases is broad and spreading out over a widening number of goods and services,” he writes in an investor note. If inflation concerns become entrenched, as they appear to be, this will continue to put pressure on wages and firms’ price-setting behavior. Hedge fund king and inflation hawk Ray Dalio warned in a LinkedIn post yesterday that the inflation problem will erode Americans’ wealth. It will certainly push investors to seek out ever greater returns.


Reader’s note: As I continue with my Tocquevillian travels through America (well, the tri-state area anyhow), the inimitable Rey Mashayekhi will takes the keys to Bull Sheet Monday-Wednesday next week. I will see you back here next Thursday at a more markets-conducive time.


Have a lovely weekend. But first, there’s more news below.


Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's reads

Muslims can’t trade crypto, says the head of Sharia compliance in the world’s largest Islamic countryFortune

Rivian buyers don’t have their cars yet, but a tidy profit from the IPO may have consoled themFortune

Homes sold at the fastest pace in history in 2021Fortune

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