The Crude Oil Divergence Continues

Crude oil remains under pressure as China’s lockdowns weigh on demand and fears of a global recession rise.

With that said, one thing that traders are keeping an eye on into year-end is the divergence between crude oil’s price and energy stock performance. The two had traded in tandem from January through July when they began to go their separate ways. 🧭

While energy remains the best-performing sector year-to-date, many traders are wondering whether or not it will “catch down” to the price of crude over the coming months.

Bulls argue that the structural energy issues and record profits justify the strength of energy stocks. However, bears say that this divergence cannot last. And with global demand for oil and other energy products falling, then energy stocks will have to fall. πŸ‚ 🐻

Who will be right remains to be seen, but this is a major theme the community is watching. πŸ‘€

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One Final Inflation Reading

Whether we like it or not, the Fed’s decisions will have an impact on crypto prices next week. So, let’s recap today’s economic data, as it included the last inflation reading before the Fed makes a decision on rates.

The Federal Reserve’s preferred inflation metric came in better than expected in December, continuing the disinflation trend. πŸ”»

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The Sixth Straight Decline

Today’s data was not only a surprise because inflation continued its downward trend. But also because the analysts nailed the numbers. Talk about a rare occurrence. 🀯

Anyway, let’s get into today’s consumer price index (CPI) print, Biden’s talking points, and the market’s reaction.

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A SLAYbor Market Update

January’s nonfarm payroll report was released this morning and was great news. Or bad news. Honestly, we’re not so sure anymore. 🀷

The economy added 517,000 jobs in January, blowing away the 187,000 consensus estimate. The blockbuster gain pushed the unemployment rate to a 53-year low of 3.4%. The labor force participation rate also ticked up marginally to 62.4% as higher wages lure people back into the workforce.

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