Investing.com – Top 5 things that rocked U.S. markets this week
1. US Stocks Post Strong End to Weak First Quarter
US stocks rallied sharply Friday as tech stocks rebounded but that failed to avert a quarterly loss for the broader U.S. stock market as damage from the selloff on U.S-China trade war fears a week earlier weighed heavily.
Fading trade war fears, however, was not the panacea for investor jitters as the tech selloff – partly offset Friday – spooked investors forcing them to unwind some of their bullish bets on the hottest sector in the market over the past year or so.
The tech rout came as Facebook (NASDAQ:FB) tumbled – before pairing losses Friday – as the fallout from the Cambridge Analytica scandal intensified after the Federal Trade Commission said Monday it takes "very seriously recent press reports raising substantial concerns about the privacy practices of Facebook.”
The scandal weighed on both the shares of Google (NASDAQ:GOOGL) and Twitter Inc (NYSE:TWTR) as traders speculated that both companies could become embroiled in the data breach scandal, increasing their vulnerability to regulatory action.
Amazon (NASDAQ:AMZN), meanwhile, ended the week at a more than one-month low after reports that U.S. President Donald Trump was mulling a change to the company’s tax treatment.
While the White House said there were “no announcements and no specific policies or actions” that were currently being pushed forward on Amazon, U.S. President Donald Trump criticised the-commerce behemoth’s tax practices Friday.
"I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!" Trump wrote in a tweet.
The S&P 500 rose 1.38% Friday but ended the quarter in negative.
2. WTI Crude Notches 7.5% Quarterly Win
Crude oil prices settled higher Thursday, ending the first quarter up 7.5% as losses in February were offset by strong gains in January and March as traders remained bullish through the quarter that OPEC cuts would keep supplies edging lower.
Yet, the uptick in U.S. production continued to gather pace as the most recent report from the Energy Information Administration revealed crude output rose to a record 10.43 million barrels a day.
During the quarter OPEC, the Energy Information Administration, and the International Energy Agency revised upward their production of non-OPEC output, led by the U.S.
On Thursday U.S. crude futures rose 0.87% to settle at $64.94 a barrel.
3. Dollar Bounce Failed to Materialise
The dollar suffered a poor end to the week and recorded yet another quarterly slump. The quarterly loss comes as the Federal Reserve raised rates during the quarter but failed to give the go ahead for a fourth rate hike, sticking to its December outlook of three rate hikes this year.
The Federal Reserve did, however, raise its estimates for economic growth and paved a path to steeper monetary policy tightening but this was played down by market participants citing the Fed’s timid inflation outlook.
Euro strength also weighed on the dollar during the quarter as market participants continued to bet that the European Central Bank was on track to adopt tighter monetary policy measures sooner rather than later.
Improving sentiment on Brexit, meanwhile, saw the pound rally sharply against the dollar in the first three weeks of the month, stifling the greenback’s attempt to mount a recovery.
The dollar fell 0.03% to 89.73 against a basket of currencies on Thursday.
4. Gold Ekes Gain Amid Dollar Weakness
Gold prices prices eked a quarterly gain largely driven by dollar weakness as rival currencies made strong gains, limiting upward momentum in the greenback.
Renewed safe-haven demand amid heightened U.S.-China tensions on trade tariffs, which have since eased, also helped the yellow metal offset the impact of a Federal Reserve rate hike.
While the Fed is poised to raise rates at least twice this year, traders continue to bet that the yellow metal will prevail despite a higher interest rate environment.
"Our commodities team believes that the dislocation between the gold prices and U.S. rates is here to say," Goldman Sachs analysts, led by Eugene King, said in a research note earlier this week.
5. The Bears Firmly Behind the Bitcoin Wheel
Bitcoin remained on track to end the month nursing heavy losses after selling pressure resumed this week as traders continued to abandon their bullish outlook on cryptos.
Investor uncertainty concerning a potential regulatory crackdown in the industry was highlighted by some as one of the main factors. Yet, others pointed to the lack of regulatory action on cryptos following the recent G20 meeting as evidence to contrary.
Moves by tech behemoths Facebook, Google and Twitter to ban crypto-related advertising did little to help sentiment, however, at a time when demand for bitcoin and cryptocurrencies was sorely lacking.
At its peak in December, bitcoin had a market capitalisation of $327 billion, while the total market cap of the entire crypto space was well above $800 billion. After a tumultuous first quarter, however, the total cryptomarket cap is under $300 billion.
With little demand to support crypto prices, some of the large-cap cryptos have seen their gains achieved during the latter part of 2017 wiped out.
Bitcoin traded at $7,217.8, down from its peak of $19,891 on the Bitfinex exchange, while Ethereum traded at $390.09 well below its peak of $1,423.20. Ripple XRP, meanwhile, traded at $0.51613, after hitting a peak of $3.28 in January on the Poloniex exchange.
