Here is why Crypto and stock are reacting negatively:
Downward revisions to the non-farm payroll numbers can have a significant impact on both stock and crypto markets. Here's how:
Stock Market
* Investor Sentiment: Weaker-than-expected job numbers can dampen investor sentiment. This may lead to a decrease in overall market confidence and a sell-off in stocks.
* Economic Outlook: A weaker labor market suggests a potentially slower economy. This can reduce corporate earnings expectations, leading to lower stock prices.
* Fed Policy Expectations: If the Fed perceives the economy to be slowing, it might be less likely to raise interest rates. Lower interest rates can boost stock prices, but they can also increase inflation concerns, which can negatively impact the market.
Crypto Market
* Risk Appetite: A decline in overall market risk appetite can lead to investors selling riskier assets, including cryptocurrencies.
* Correlation with Stocks: Cryptocurrencies often have a correlation with traditional financial markets. A downturn in the stock market can lead to a sell-off in cryptocurrencies.
* Regulatory Sentiment: Weaker economic conditions might influence regulatory sentiment towards cryptocurrencies. If regulators perceive cryptocurrencies as risky assets in a slowing economy, they may tighten regulations.
* Overall market conditions: If the market is already experiencing a downturn, the impact of the revised numbers might be amplified.
* Investor expectations: If investors were already expecting weaker-than-expected numbers, the impact might be less severe.
* Other economic indicators: If other economic indicators, such as consumer spending or industrial production, are showing strength, the impact of the revised payroll numbers might be limited.
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