US Close – ISM hits 2-year low, Au Revoir 3.00% on recession worries, Choppy waters for Stocks, Commodity Markets tired of softening, Bitcoin tests $18K waters

US stocks can’t muster up a meaningful rally heading into the long weekend as recession worries grow after the ISM manufacturing report fell to a two-year low. Wall Street isn’t liking seeing so many key economic indicators have a trajectory that looks like they will retest some of the pandemic lows.  A choppy period seems likely until investors feel confident that the economy is still in decent shape and that the Fed won’t miss the opportunity to decelerate their tightening pace in September. 


The ISM manufacturing report disappointed but everyone saw that coming given the weak Fed regional surveys.  The headline index fell from 56.1 to 53.0, a two-year low and a sharper decline than the expected 54.5 consensus estimate.  The report paints a picture that supply side is improving and demand side isn’t do all that much.  Employment is cooling, but with the demand outlook remaining positive a severe contraction seems unlikely. 

3.00% no more

The 10-year Treasury yield said, “au revoir” to the 3.00% level as recession fears triggered strong demand for bonds.  Fixed income traders are now starting to realize that the market might not be pricing in enough rate cuts for when this market falls into a recession next year.  The peak in yields might be in place and that could keep yields drifting lower.


Crude prices are finishing the week on a high note as Libya’s political crisis is leading to a steep drop with oil exports.  We’ve seen this movie before and a tight oil market and force majeure at key ports should provide underlying support for oil prices. 

Recession fears are killing the crude demand outlook, but with prices roughly 17% lower from the March high, oil shouldn’t go much lower given the current supply outlook. 


Gold prices pared losses after the 10-year Treasury yield extended declines following a soft ISM manufacturing report that suggested the labor market is cooling.  It looks like gold could get its groove back once financial markets start focusing more so on how aggressive the Fed will tighten once the economy enters a recession and not how far above neutral will the Fed take rates over the next 12 months. 

Gold’s earlier losses stemmed from news that India raised the import tax on gold in order to provide some support for the rupee.  The USD 1785 level was massive support for gold and if that continues to hold early next week, the precious metal should consolidate and possibly edge higher towards the SUD 1840 region. 


A plethora of bearish crypto headlines continues to drag down bitcoin below key technical levels. Sentiment will take some time to improve, especially after many anticipated crypto deals are falling apart.  eToro had to abandon a deal to go public via SPAC merger, many troubled companies, like BlockFi are scrambling for deals to stay afloat. 

Bitcoin tentatively fell below USD 18,000 but has pared losses as buyers start to emerge. How low bitcoin goes depends on whether the stock market made a bottom and if no major crypto company falls into liquidation. 

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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, 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.