Good morning and welcome to the stock market today! Wall Street is seeing a shake up after the April jobs report, and investors are on watch. So what will the stock market do today?
- The S&P 500 is up 0.72%
- The Dow Jones Industrial Average is up 0.45%
- The Nasdaq Composite is up 1.30%
So what will the stock market do today? Here are some of the top stories.
What Will the Stock Market Do Today? Talk Jobs.
Going into this morning, Wall Street was growing confident in a linear recovery story.
Analysts were calling for the April non-farm payrolls figure to come in at 1 million. Hopes were high that the ongoing Covid-19 vaccine rollout and easing restrictions would get American workers back into jobs. Instead, we learned this morning that the economy added just 266,000 jobs last month. Job gains from March 2021 were also revised lower.
The immediate takeaway is that Covid-19 recovery is not a linear story. As Courtenay Brown wrote for Axios, the report proves that “economics are not a science” and that the recovery story will continue to be “rocky.”
Complicating the story is growing talk of a shortage in the labor market. Leading up to Friday morning, analysts said that a labor shortage would constrict job growth in April. In other words, that we could see a figure higher than 1 million, but employers are struggling to recruit enough workers. Contributing factors include (depending on who you ask) enhanced unemployment benefits, inadequate hourly wages, remaining Covid-19 health risks and remote learning.
So what comes next? As Brown also highlighted, the stock market reacted favorably to the report, because it provides added justification for the Federal Reserve’s stance. Expectations for a rate hike before December 2022 are now back below 50%.
For investors, growth stocks may look extra sparkly right now. However, with evidence of a bubble emerging, it makes to take some profits now.
Old-School Gold Still Has Its Sparkle
Bitcoin (CCC:BTC-USD) has been the talk of Wall Street, but old-school gold is leading the way higher on Friday morning. In fact, gold prices have topped new highs since February 2021, climbing back above $1,840 per ounce.
So what is driving the move? And what can investors learn from it?
Gold is what many investors see as the original hedge against inflation. The precious metal started gaining traction at the beginning of the pandemic, with Congress and the Federal Reserve pumping money into the economy. A recent dip in the real yield of the 10-year U.S. Treasury note has helped gold retouch its recent highs. That is because lower yields help gold prices, which analysts say are now below fair value.
Heading into this morning, there was concern that this bullish catalyst would soon meet its end with the April payrolls report. This is because of what analysts call tapering talk — the idea that the Fed will soon have to reversing its inflation-boosting policies. However, the disappointing report has, as Zero Hedge wrote, tapered that tapering talk. Gold prices now are looking to keep climbing.
Does this mean Bitcoin is old news? No. In fact, as CoinDesk wrote, history shows us that an upswing in gold prices can help lead BTC higher.
Creator Economy Meets Crypto
There is no denying that Covid-19 has thrust the creator economy into a boom period — 29% of American students say they aspire to become creators. As such, venture capital money is quickly flowing into this space, and a new report from Antler shows where it is going. The fastest-growing category is audience monetization, platforms that help creators monetize their audience once they have a platform.
As Kaya Yurieff wrote for The Information, this is necessary because creators face limits on branded posts. Audience monetization platforms promise turn regular audience members into super fans, and allow creators to sell educational content, fan interactions and even social tokens.
But what are social tokens? As InvestorPlace contributor William White wrote recently, social tokens are a quickly emerging cryptocurrency trend. They are a form of crypto token that allows users to buy into a brand, creator or community. In some cases, the creator or brand does not even have to be involved. Popular platforms include Bitclout, Rally, Creaton and Roll.
So what does this really mean? And why should investors care? Well, we know that the creator economy and cryptocurrencies are both exploding right now. Social tokens are the intersection, and quickly garnering attention. Carole Baskin of Tiger King fame launched a fan token on Rally this week, and search interest around her $CAT coin remains high. The Winklevoss twins have also identified social tokens as one of the most-promising endeavors in the crypto space.
The bottom line: Whether we are seeing a boom or a bubble in the market, investors are looking for new opportunities. Social tokens are already kicking non-fungible tokens (NFTs) out of the hot seat.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.