Inflation and claims — What you need to know in markets on Thursday

Myles Udland
Markets Reporter

After stocks shot higher on Monday and markets were pre-occupied with Apple’s (AAPL) latest iPhone announcement on Tuesday, Wednesday was a calmer day on Wall Street.

In the end, the major averages finished higher, though little changed, with the Dow gaining 39 points, the S&P 500 reaching a new record close (up 1.9 points), and the tech-heavy Nasdaq adding 5 points.

On Thursday, investors will have two pieces of economic data to sift through: the weekly report on initial jobless claims and the monthly report on inflation due out in the morning.

The claims number will be more closely watched by investors than usual given that some distortions — the recent hurricanes in Texas and Florida — could impact this figure, which tracks weekly first-time filings for unemployment insurance.

Inflation data will be a key point for Fed watchers, as “core” inflation — which excludes the more volatile costs of food and gas — is expected to have risen just 1.6% over last year in August, well below the Fed’s 2% target. Keep in mind that the next Fed interest rate decision is due on September 20 following the FOMC meeting, which kicks off on Tuesday, September 19.

Federal Reserve Chair Janet Yellen

Wall Street loves talking Bitcoin

Bitcoin is having a week.

On Tuesday morning, Bank of America Merrill Lynch’s latest fund manager survey indicated that the 181 investment professionals the firm talked to see bets on Bitcoin’s price rising as the market’s most crowded trade right now.

Also on Tuesday, JPMorgan (JPM) CEO Jamie Dimon made headlines when he compared Bitcoin’s more than 300% price rally this year to the Dutch tulip bubble of the 1600s. Dimon also said he would fire any trader at JPMorgan he found out was messing with Bitcoin.

Later on Tuesday, bond investor Jeff Gundlach said, “I’m going to let this mania go on without me,” adding that back in August his 86-year-old mother was asking him about whether or not she needed to be buying Bitcoin.

Bitcoin’s crazy price run over the year. (Source: Bespoke Investment Group)

And then on Wednesday, Dimon’s colleague Marko Kolanovic said, “Cryptocurrencies cannot be reliably valued and they have significant ‘tail risk’ that could come in the form of a regulatory ban. Moreover, the whole cryptocurrency market exhibits some parallels to fraudulent pyramid schemes.

But the main takeaway here is not really what Wall Streeters are saying about Bitcoin, because at this point in Bitcoin’s evolution there are basically those who love it and those who hate it. There is less room for nuance.

What’s important is that Wall Street is talking about it at all.

Because when folks like Dimon and Gundlach and Kolanovic speak publicly, they are not only saying what’s on their minds but also largely responding to what clients have been asking them.

And given the confluence of commentary we’re seeing around Bitcoin, cryptocurrencies, and the blockchain technology that underwrites this technology, it’s clear that investors are interested in crypto, one way or another.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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