Jobs Report, Supreme Court & Tax Constitutionality, Argentina's Milei, Top Songs, China, and more

The Unemployment Line: Betting On Friday’s On A Cooling Labor Market - Jobs Report

On Friday, the Bureau of Labor Statistics will release its Employment Situation Report for November, which will resolve Kalshi’s monthly Unemployment and Jobs numbers markets. But today’s Job Openings and Labor Turnover Survey (JOLTS) numbers might give us some insight into what to expect.

According to the report, the number of job openings in the US decreased to 8.7 million in October, a decline of 6.6% and well below the consensus estimate of 9.3 million. It’s the lowest number of job openings since March 2021.

On the one hand, this is good news for employers who have been navigating an extremely tight post-Covid job market.

On the other hand, it could be a sign that employers are hiring less because they are worried that the economy is contracting. It might also be a sign that the jobs market is cooling off.

If you agree with that bearish assessment, check out Kalshi’s Unemployment and Jobs numbers markets and trade accordingly. If you disagree, take the other side of the trade and prove the naysayers wrong.

Profiting Off PMI: Trading On Yesterday's Reports

Later today (10:00 am EST), the Institute for Supply Management (ISM) will release its Services Purchasing Managers' Index (PMI) for November. S&P Global will also release its monthly US Services PMI (9:45 am EST). These reports are considered an important gauge of the US economy.

The current consensus for November’s ISM PMI is 52%, while the consensus for today’s S&P PMI report is 50.8%. If one or both of today’s reports come in far above expectations, it may be a sign that the economy is not cooling as fast as expected. That could be bad news for the Fed’s fight against inflation and may temper expectations for interest rate cuts in early-to-mid 2024.

However, if the reports come in far below the consensus numbers, it could be viewed as a warning that the economy is stalling, which could pressure the Fed to cut rates.

This Christmas Song Just Made History. But Will It Make You Money?

Christmas came early for singer Brenda Lee. Or, to look at it another way, it came 65 years late.

For the first time since its release in 1958, her holiday classic "Rockin' Around the Christmas Tree" is at the top of the Billboard Hot 100 chart. That marks the longest period for a song to reach the top spot after its release.

And at age 78, Lee is now the oldest performer to top the iconic Billboard chart.

Clearly, the song made history. But can it make you money?

Head to the “Billboard Hot 100 #1” market and check the prices. If you think the song has staying power and will remain on top for another week, “Yes” contracts are trading at $0.86.

But if you’re more of a Scrooge and think it will flame out, you can scoop up “No” contracts at $0.20.

Would You Bet On A Moderate Milei?

During his recent presidential campaign, Javier Milei promised to rein in spiraling inflation by adopting the U.S. dollar as the national currency and disbanding the country’s central bank.

But with his inauguration less than a week away, will we see a manic Milei governing Argentina, or will we see Milei the moderate?

A recent editorial in Foreign Affairs is expecting moderation, at least to some extent. The article points out that Milei is already backtracking on “complete dollarization and shutting down Argentina’s central bank.”

Foreign Affairs also notes that Milei’s party controls only “7 of 72 senators and 38 of 257 deputies and does not control a single provincial governorship or local mayor’s office.”

In other words, if he wants to get anything done, he’ll have to compromise with other center-right parties and pragmatic leftists.

Then again, considering that Milei recently appointed a former neo-Nazi to a top legal post, do you really want to bet on moderation?

Either way, check out the “Argentina dollarizes its economy” and “Argentina central bank shuts down” markets, and make a trade on which way Milei and Argentina are headed.

Big Bubble, Little China?

The ratings agency Moody’s downgraded its outlook on China's credit rating to negative earlier today. The move comes in response to a major downturn in the Chinese property market, which led to a subsequent surge in local government debt.

The agency is fearful that the ongoing crisis could lead to “structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector.”

Moody’s also expects China’s economic growth rate to slow to 4% for the next two years, with the potential to drop as low as 3.5% by 2030. As for 2023, the country is still expected to see growth of around 5%.

Of course, Moody’s was one of the credit agencies that dropped the ball during the subprime mortgage crisis back in 2007, so maybe they’re overcompensating a bit these days.

At any rate, if you think Moody’s projections are accurate, head over to the China GDP growth market and trade accordingly. And if you’ve watched The Big Short one too many times to trust the credit agencies, now is your chance to bet against them.

SCOTUS Watch: No Taxation Without Realization?

Earlier today, the Supreme Court heard oral arguments for Moore v United States, a tax dispute involving an American couple (Charles and Kathleen Moore) who own part of an Indian corporation.

Why should you care?

Because, apparently, the outcome of the case could blow up the Federal tax code.

In 2017, Congress passed the mandatory repatriation tax (MRT), a one-time tax on foreign corporate earnings. That might sound straightforward, but there’s a catch.

Because the Moores are still holding their stake in the company and have not yet realized a profit, they contend that there is no income to tax.

The IRS and its lawyers see things differently.

The case was widely viewed as an attempt to preempt any future “wealth tax.” And due to the current Court’s conservative makeup, many observers liked the Moores’ chances. 

But at today’s oral arguments, most justices appeared skeptical. Ian Millhiser, a writer for Vox, even claimed that “fiscal policy wonks… can probably heave a sigh of relief.”

Many traders on Kalshi agreed, and “Yes” contracts in the “SCOTUS deems repatriation tax unconstitutional” market dropped from $0.63 to $0.57.

But since traders still give the Moores a 57% chance of winning, maybe those “policy wonks” should keep their guard up for a bit longer.

Will The Independent Spirt Awards Help Oscar Longshots?

Nominees for the 2024 Film Independent Spirit Awards were announced earlier today. And that should interest anyone trading on Kalshi’s Oscars Best Picture market.

While it’s certainly no guarantee of future success, early nominations for smaller awards (Independent Spirit, Golden Globes, etc.) are commonly viewed as a good sign for Oscar contenders.

And if that’s the case, it bodes well for American Fiction, May December, and Past Lives, all of which were nominated for Best Picture.

In particular, “Yes” contracts for American Fiction have doubled on the news, with traders hoping to cash in on a long shot. It’s currently at $0.20.

While May December and Past Lives have yet to see much movement, that could easily change if they manage to win. So keep an eye out for the 39th Independent Spirit Awards on February 25.