foxex: ALL AGLOW!

The Market Sum | INVESTOPEDIA

Insight after the bell

By Caleb Silver, Editor in Chief

Wednesday's headlines-

1- All Aglow

2- Bitcoin turns 10

3- Chart of the day: Bitcoin at 10! The journey so far...

Markets Close

Dow
25,115.76 +0.97%

S&P
2,711.73 +1.08%

Nasdaq
7,305.90 +2.01%

VIX
21.13 -9.08%

Bitcoin*
6,345.27 +0.70%

EUR/USD*
1.1328 0.00%

*Currency markets and Bitcoin trade 24 hours, the figures here indicate movements between 9am and 4pm ET

Image courtesy: Investopedia reader Todd Houge and his son

1- All Aglow
Finally, some good news to end this turbulent month. This two-day rally to end Red October added a good 800 points to the DJIA and may have settled some nerves in the short term. This is not to say that the volatility and wicked sell-offs are behind us. They are likely not. Midterm elections are next week, the Fed is likely to raise rates at its next meeting in November, the trade war is far from over and there are many other landmines out there that can be triggered at any moment. Here is how the markets ended up in October:

DJIA: -5.08%
S&P 500: -6.94%
Nasdaq: -9.2%

The good news we are talking about, however, is wage increases! Real wages increased for the first time since 2009, according to the Labor Dept. Workers in nearly all sectors tracked by the Bureau of Labor Statistics saw increases in the past quarter of 3.1 percent, on average. Private companies also reported a big uptick in hiring, adding 227,000 workers to their payrolls in the past week.

Read the Labor Dept's release on wages and see if it matches up with what you are seeing in your company or industry.

Why it Matters: Wage increases were the missing ingredient since the U.S. economic recovery began in 2009. The stock market was rising (with more than a little help from the Fed), unemployment was falling, and the economy was growing - but wages were stuck. With inflation creeping higher and rising interest rates, there was plenty of concern that the economy was overheating and consumers were not going to keep up. Today's report assuaged those concerns - for now - but economists and investors will need to see proof that this trend has legs. Given that companies are already benefiting from lower taxes, 2019 will be a real test of whether they will continue to reward their employees with their largesse.

What's next: The non-farm payrolls report for October will be released Friday, and economists estimate that 190,000 jobs were added in the month. Hurricane Florence may have impacted that number, but don't pay too much attention to the noise. Focus on the trend. If the number comes in higher than expected and unemployment remains at 3.7 percent, or ticks even lower, it will be a positive sign that the U.S. economy is humming along at the right speed.

The FOMC will meet next on November 7-8 and most people expect another rate hike. That may have already been priced into the market, as they say. It's what the Fed says at that meeting about future increases that matters most.

More on this: P.S. We asked Schwab's top investment strategists, Liz Ann Sonders, Jeff Kleintop and Kathy Jones, whether the Federal Reserve has gone too far in raising rates. Listen to what they had to say. They know these things as they help steer about $1.6 trillion in assets for Schwab.
Has the Fed Gone Too Far

#2 Bitcoin turns 10
Ten years ago, so the story goes, an entity known as Satoshi Nakamoto released a whitepaper called "Bitcoin: A peer to peer Electronic Cash System". In simple terms, it was the magna carta that launched a version of electronic payments that could be sent from one person or entity to another without going through a financial institution. Born out of the wreckage of the financial crisis, Bitcoin and the Blockchain ledger it lived on, seemed to be the exact alternative to a broken financial system that brought the financial world to its knees. We've written hundreds of articles about it, the blockchain, regulations and just about everything you can think of touching the subject. You can find most of that here or just search for it on our site. We even created two online video courses for people who wanted to learn more about cryptocurrency and invest in it in some way. Find those here.

While a small group of early adopters, enthusiasts and government entities traded Bitcoin and accumulated it, it didn't break into the mainstream investor consciousness until the end of 2016. About a year ago, Bitcoin and other cryptocurrencies were on a meteoric rise, propelled by unbridled crypto enthusiasts, day traders, Reddit chat rooms, celebrity tokens and investors who believed the hype despite their lack of understanding. Everyone from DJ Khaled to Paris Hilton endorsed a token or backed an Initial Coin Offering for which they were likely paid in real dollars. When the ball dropped on Times Square signifying the beginning of 2018, the bottom seemed to fall out completely. Today, Bitcoin trades 3 percent lower than it did a year ago and many other tokens have been wiped off the map completely. No doubt about it, Bitcoin is a survivor. We have no idea where it will trade, if it will trade, or what it will look like in one month, one year or ten, but it is the original and has stood the test of time, so far.

We won't get into the entire history of the rise and fall of Bitcoin and its ilk, but these will bring you up to speed:
How Does Bitcoin Mining Work?
Bitcoin's 10th Birthday: Was the Nakamoto White Paper Right?
Three People Who Were Supposedly Bitcoin Founder Satoshi Nakamoto

For our Chart of the Day, we offer you Bitcoin's rise, fall and aftermath, along with the key events that impacted its price. Note the lack of volatility in the past 7 months compared to the heart attack of the 6 months prior.

Happy Halloween!

Chart of the day: Bitcoin at 10! The journey so far...