🟪 Friday Shadowy Charts

Punxsutawney Phil is back in his burrow after seeing his shadow yesterday, hunkered down for another six weeks of winter. After seeing this morning's economic data, you might have expected markets to do the same.

This issue is brought to you by: "This is one time where television really fails to capture the true excitement of a large squirrel predicting the weather."   – Phil Connors, Groundhog Day Friday Shadowy Charts   Punxsutawney Phil is back in his burrow after seeing his shadow yesterday, hunkered down for another six weeks of winter.   After seeing this morning's economic data, you might have expected markets to do the same: Surely a way-too-hot jobs print calls for another six weeks of bear markets?   But we're feeling brave at the moment: Stocks and bonds were only modestly lower on the news, and crypto was insouciantly higher.   As of just recently, good news was considered bad news: Hot economic data meant the Fed would put the hammer down on markets.   Now, good news seems to be good news: Hot economic data means the economy is landing softly.    We may have been encouraged by Chair Powell's relative optimism that a recession can be narrowly avoided. But he's been talking soft landing the entire time, we just never believed him until now.   How will he feel after seeing today's data? I suspect he'd like us to get back in our burrow and stay there for a while — and that he may take matters into his own hands if we don't.   If so, the fate of Punxsutawney Phil's ill-fated Canadian counterpart could offer markets a cautionary tale.   Let's hope it doesn't come to that, poor guy.   Too much of a good thing? Or too good to be true? Fun fact: According to this morning's BLS report, the US economy lost 2.5 million jobs in January. It's only the seasonal adjustments that get us to the gain of 517,000 that's making headlines.   The unadjusted job losses are the smallest percentage decline for the month of January since 1984. But that could be for all kinds of reasons, like warmer than normal weather and employers holding on to seasonal workers for a little longer than normal.   TLDR: The job market may not be as tight as the adjusted data suggests.   Why so surprised? That bottom row, information, has been making all the headlines and souring sentiment. But Big Tech is bigger in our minds than it is in reality. Job losses at the likes of Google are easily outnumbered by gains at the likes of Chipotle.   That's not the worst thing: You might rather write code than sling burritos, but tighter conditions at the lower end of the jobs market means the gains are going where they're most needed.   Landing softly? Overall, wage growth decelerated to 4.4% in January, bringing it rapidly toward goldilocks territory: Not too hot, not too cold.   Not landing at all? The unemployment rate hit a 53-year low of 3.4% in January, suggesting most everyone who wants a job (be it making software or making burritos) has one. This will make the Fed nervous.   Landing aborted? On Wednesday, the BLS reported job openings rebounding by 572,000 to 11 million for the month of December. 11 million is a lot! Powell's soft landing scenario which no one believed until now has been predicated on job openings falling with minimal layoffs. Now we've got job openings rising with no layoffs. Hmmm.    It's not just the jobs data: The ISM Services index rebounded back into expansionary territory with this morning's print of 55.2: "A majority of panelists indicated that business is trending in a positive direction." New orders shot up to 60.4.    And it's not just the US: An IMF report out this week projects every major economy other than the floundering UK to record positive GDP growth this year.   No one thought the US could land softly, and now even Europe will too??? That is great news for wage-earning people, but worrying news for inflation-fighting central bankers.   And for profit-seeking investors? It's hard to say.    You might want to do like Punxsutawney Phil and give it another six weeks or so.   Have a great weekend, lovable rodents. — Byron Gilliam P.S. — Find this newsletter helpful? Share it! Was this newsletter forwarded to you? Sign up here. Top Stories Ripple Bought $8.4B XRP Since SEC Lawsuit 'To Support Healthy Markets' — Blockworks Reddit's Crypto Moons Upvote a 73% Surge in 2023 — Blockworks Latest in Crypto Hiring: Layoffs Spike but Turnaround Ahead? — Blockworks  MakerDAO Founder Seeks $14 Million in MKR To Fight Climate Change — Blockworks  Jobs Data Crushes Estimates, Markets Rethink Fed Predictions — Blockworks  State Street and BlackRock Boost Silvergate Stake. What is the Stock Doing? — Blockworks EBay NFT Job Openings Hint At Web3 Showdown With Amazon — Blockworks Where's the Non-Bitcoin Market Headed Over Coming Months? — Blockworks Australia To Tackle Crypto Regulation in Three Stages — Blockworks Bitcoin-hungry MicroStrategy Posts $250M Net Loss in Q4 — Blockworks This issue is brought to you by: Join the future of decentralized fundraising with AngelBlock, the non-custodial DeFi protocol that is revolutionizing token-based raises.     As the DeFi market is estimated to have a 43.8% CAGR until 2030, they understand the importance of building secure infrastructure to support this growth. 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As a reminder, a VP from Google received a compensation package worth $646M to build this.  Opensea started off with a considerable lead with a commanding 90+% market share in early 2022, but has fallen to <40% today with the rise of Blur. Hopefully you have been sweeping the floors of some NFTs on Blur because its token launch is happening on Valentines Day.   For daily alpha delivered to your inbox, subscribe to Blockworks Research Newsletter. What's Trending Understanding the concepts of MEV and PBS (Thread) — Blockworks MATIC - sleeping giant… (Thread) — Steve Goulden 5 free research tools I use daily (Thread) — hoeem While the rumors of Coinbase NFT shutting down don't seem to be true (Thread) — Blockworks Research Risk & analytics hold the key to unlocking DeFi (Thread) — Anthony Loya We're Watching In today's episode of Empire, we discuss how crypto startups are running out of cash. Will more companies quietly shut down, and how will the survivors navigate the market?   Watch and listen to Empire on Youtube, Spotify, and Apple Podcasts. Written by Byron Gilliam Produced by Kat Dittmeier Follow Blockworks on Twitter, LinkedIn, YouTube, Telegram and Instagram. Was this email forwarded to you? Sign up for free to join over 180,000 investors who read Blockworks newsletter daily.  Update your email subscription preferences here. Copyright ©2022 Blockworks. All rights reserved.