Investing.com – Top 5 things that rocked U.S. markets this quarter
1. Familiar Foes Return to Spook US Equities
As the new quarter of earnings season gathered pace, old foes returned to haunt U.S. equities.
Surging bond yields spooked equity investors as the 10-year treasury yield rose to a nearly four-year high to move within a whisker of 3%. While a slump in Apple (NASDAQ:AAPL) on concerns over a weak iPhone sales also weighed on the broader market.
Canaccord lowered its March and June quarter estimates for iPhone sales to between 48.0 million and 39.4 million from between 53.1 million and 43.7 million, citing the high price of the iPhone X was stifling demand.
"For the mature North America market, we believe the price point above $1,000 has been a greater deterrent for broad market appeal than anticipated," Canaccord said.
In corporate earnings, Netflix Inc (NASDAQ:NFLX) producer a blowout quarter propelling its share price to an all-time high. But the pick of the bunch was General Electric Company (NYSE:GE) as it topped earnings estimates and surprised investors by maintaining its outlook for the rest of 2018.
The S&P 500 closed roughly unchanged for the week after shedding 0.85% on Friday.
2. Crude Oil Prices Notch Second-Straight Weekly Gain
Crude oil prices ended the week at nearly three-and-a-half year highs on expectations that oil markets are nearing rebalancing after OPEC and its allies compliance rose to the highest ever.
Major oil producers’ commitment to continue slashing oil production reined in excess crude supplies, which stood at just 12 million barrels above the five-year average in March, Reuters reported Thursday, citing a source familiar with the matter.
Oil prices also had to contend with a tweet from U.S. President Donald Trump, blaming OPEC for "artificially very high" oil prices, insisting that it would not be accepted.
On Friday U.S. crude futures posted a second-straight weekly win, settling 9 cents higher at $68.38 a barrel.
3. Dollar Rides Steeper Yield Curve to Weekly Win
The dollar swung to a weekly win from a loss last week against its rivals supported by surging bond yields and a slump in sterling.
The U.S. 10-year treasury yield jumped above a key 2.9% level as traders bet that both inflation would continue to make modest strides, and U.S. economic growth would remain solid.
Investors’ outlook on inflation was also bolstered by the Federal Reserve’s Beige Book report released Wednesday, suggesting that consumer inflation was set to gather pace as rising input costs could be passed onto consumers in some U.S. districts.
Momentum in the greenback was also helped by slump in sterling this week as dovish comments from Bank of England governor Mark Carney scaled back investor expectations that a May rate hike was a foregone conclusion.
The dollar rose 0.47% to 90.06 against a basket of major currencies on Friday.
4. Gold’s Glitter Diminishes as Geopolitical Tensions Fade
Gold prices snapped a two-week winning streak Friday as safe-haven demand faded amid easing geopolitical concerns, while continued dollar strength weighed on sentiment.
Falling safe-haven demand comes as U.S. military intervention in Syria was less extensive than some had feared, while improving U.S.-North Korea relations also weighed.
U.S. President Donald Trump said earlier this week that he hoped a summit with North Korean leader Kim Jong Un would be successful.
Despite the bearish week for gold prices, traders appeared to resumed their bets for an upward move in the precious metal.
CFTC COT data showed money managers increased their net long positions in gold futures to 157,925, up 3,881 lots for the week ended April 17.
It could be a bit premature to declare that the rally in bitcoin this week marked the start of a turnaround in cryptocurrencies. But the positive shift in sentiment suggested there was some truth to claims that the end of the U.S. tax season would trigger a crypto rally.
Analysts made bullish calls earlier this week, predicting that the wave of selling in cryptos to fund taxes – following huge crypto profits in 2017 – would grind to a halt, supporting a rebound in cryptocurrencies.
Spencer Bogart, partner at Blockchain Capital told CNBC on Monday that he expected the downward pressure on crypto prices to abate after tax day, while Tom Lee, managing partner at Fundstrat Global Advisors, said the end of tax-selling pressure would support a rally in bitcoin to $25,000 by the end of 2018.
One of the main positives from this week’s rally appeared to be a willingness from traders to buy the dips in cryptos – something that was absent in recent weeks – pointing to firmer crypto demand.
Crypto investors backed bitcoin after it dipped below $8,000 on Tuesday amid reports the New York Attorney General Eric Schneiderman launched an investigation into 13 major cryptocurrency exchanges trading cryptocurrencies including bitcoin.
Others, however, said the move lower was isolated to a single large investor, or “whale,” dumping holdings of bitcoin.
That said, however, the uptick in total cryptomarket cap pointed to renewed demand.
The total market cap of cryptocurrencies rose to about $380 billion – at the time of writing – from about $250 billion last week, according to coinmarketcap.com
Bitcoin rose 3.09% to $8,501.6, on the Bitfinex exchange, Ethereum rose to $593.00, up 5.89% and Bitcoin Cash rose 18.16% to $1,119.50. Ripple XRP jumped to $0.92622, up 25.00%, on the Poloniex exchange.
