Mid-Market Update: Stocks drop on tightening and growth fears, Fed speak, Treasury uses special measures, US Data, Oil higher, Gold shines, Bitcoin finds support ahead of $20k

US stocks are declining after another labor market statistic shows that despite all the big-tech post-pandemic layoffs, the jobs market remains hot. The labor market needs to break to allow the Fed to comfortably keep rates on hold. The risk of more rate hikes down the road will remain on the table if we don’t see the unemployment make a serious move higher above 4%. 

Fed’s Collins comments on rates did not move markets as she is standing with the majority.  Collins noted, “policy rate needs to likely rise just above 5% and need to hold rates there for some time. 

Treasury Secretary Yellen confirmed that the Treasury has begun using ‘special measures’ on debt ceiling and debt issuance suspension period will last through Monday, June 5th.  The US avoided default and the pressure will start to grow on Congress to raise the debt ceiling. 

US Data

This morning contained another round of economic data that told two stories.  Initial jobless claims data confirms that the labor market remains strong, while the Philly Fed tries to stabilize and the housing market stays stuck in a recession.

First-time claims for weekly unemployment benefits dropped by 15,000 to 190,000, the lowest levels since September.  The holiday period adds to volatility for jobless claims and so did some extreme weather.  There are too many signs that the economy is softening, but businesses are hesitant to lay off talent as they remember how hard it was to onboard.       

The Philly Fed survey improved but still remains at depressed levels.  The headline index improved from -13.7 to -8.9, slightly better than the consensus estimate of -11.0.  The survey showed that firms expect smaller cost increases this year.  Future new orders and shipments remain positive but still at low levels. 

The housing market remains stuck in a recession, but optimism is growing that the bottom is getting close.  Housing starts decline less than expected, while permits didn’t post a stronger rebound. 


Crude prices are rallying as China’s robust demand will likely lead to rising inventories and increased activity for refiners.  The short-term crude demand outlook is looking strong as the US labor market remains strong and on China’s reopening momentum. US recession fears are still here and they won’t be going away anytime soon, so WTI crude might hover around the $80 to $85 region. 

Oil pared some of its gains after the EIA crude oil report showed demand bounced, shrugging off the expected rise with inventories. A stockpile build of 8.4 million barrels, was more than the early forecast of a draw of 1.8 million, but slightly higher than yesterday’s API’s build of 7.6 million barrels.


Gold prices are rallying as investors seek safety as recession and default risks won’t be going away anytime soon.  Mixed US data continues to support the idea that the Fed might need to do more tightening given how strong the labor market remains, but the rest of the economy is weakening.  Gold will look even more attractive if the US is viewed as likely having a recession in the second half of the year, which could mean earnings will contract far worse than markets are pricing.

If gold doesn’t make a quick run towards the $1935 level, it could consolidate around the $1900 region. 


Cryptos took a hit over the past 24 hours on news that Genesis Global Capital is getting closer to a bankruptcy filing.  Genesis has been trying to find more capital or make a deal with creditors. Genesis has been in trouble since the end of last year and most of the negative news should be priced in. 

Bitcoin is higher today, mostly finding support ahead of the $20,000 level. The crypto space is getting cleaned up and as long as we don’t see a major reputable exchange go under, traders may mostly shrug off news of the demise of smaller crypto companies. 

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.