Bitcoin Trades Sideways; Equities Fall: Markets Wrap

A strong quarterly earnings season couldn’t stop US stocks from sliding on Friday. 

On the Nasdaq Composite, Robinhood (HOOD) advanced around 3.5% after having a disappointing trading debut on Thursday. Hours after HOOD’s IPO, ARK’s Cathie Wood bought shares of the trading platform’s parent company, Robinhood Markets. 

Amazon.com Inc. reported high profits of $30 billion on Thursday night but wary investors questioned if the tech giant can continue its own growth. The company’s shares shed 7.5% on Friday.

Caterpillar Inc., which reported higher earnings on Friday, told investors profits would decline due to rising costs. Following the news, the company fell around 4% intraday on the NYSE. Pinterest plunged 18% following a report, citing significant loss in user engagement. 

80% of company earnings in the S&P 500 have surpassed profit estimates, according to Bloomberg. However, at the same time, tech companies like Facebook and Apple fell 0.5% and 0.4%, respectively. 

Essentially, investors fears surrounding Covid-19 stunting economic growth and looming interest rate hikes have taken precedence over a mostly strong corporate earnings season. 

Wall Street gauges recovered some but pared losses by market close.

Equities

• The Dow fell -0.42% to 34,936.
• S&P 500 declined -0.54% to 4,395.
• Nasdaq shed -0.71% to 14,672.

Insight

Oaktree Capital co-founder Howard Marks weighed in on inflation concerns and the macro environment in a recent client note.

“The low reported U.S. inflation rates may be partially attributable to changes in recent decades in the way the Consumer Price Index is calculated, but the truth is that we know very little about inflation, including its causes and cures,” Marks added. “I describe it as ‘mysterious,’ so I believe we should put even less stock in predictions surrounding inflation than in other areas. That makes life tough for investors at the moment, because inflation and its impact on interest rates constitute the most important wildcards.”

Bitcoin downticks after Deribit, the largest crypto options exchange, settled a 1.6 billion options expiry. Despite sell-off pressures, the cryptocurrency maintained a trading rage of $38,000 to $40,000 on Friday.

Bitcoin is up 253.55% returns on investment to the dollar in the past year, according to Messari. On Wednesday, the crypto briefly touched a six-week high, trading at almost $41,000.

In decentralized finance (DeFi), Solana-based stablecoin exchange, Saber Protocol, raised $7.7 million in a seed funding round this week. DeFi tokens like Chainlink (LINK) leaped over 15% on Friday.

Insight

Co-founder of Saber Protocol, Dylan Macalinao, weighed in on the recent funding and their goal to be the liquidity network for cross-chain DeFi.

“For DeFi to reach millions of users and trillions in value, we need a blockchain that can handle mass scale. Due to its low transaction costs and high performance, we believe Solana is that blockchain,” Macalinao said.

DeFi

• Uniswap is trading at $20.45 with a total value locked of $4,254,696,078 up 6.1% in 24 hours at 4:00 pm ET. 
• Chainlink is trading at $21.7, advancing 15.1% with trading volume at $1,479,268,901 in 24 hours at 4:00 pm ET.
• DeFi:ETH is 32% at 4:00 pm ET.

Crypto

• Bitcoin is trading around $39,113.15, down -1.46% in 24 hours at 4:00 pm ET.
• Ether is trading around $2,347.83, advancing 1.56% in 24 hours at 4:00 pm ET.
• ETH:BTC is at 0.0600, up 0.86% at 4:00 pm ET.
• VIX is up 3.56% to 18.33 at 4:00 pm ET.

Fixed Income

• US 10-year treasury yields 1.237% as of 4:00 pm ET.

Commodities

• Brent crude is up to $76.33 per barrel, advancing 0.37%.
• Gold fell -1.14% to $1,827.80.

Currencies

• The US dollar strengthened 0.33%, according to the Bloomberg Dollar Spot Index.

In other news…

State Street partnered with crypto asset data provider Lukka, Blockworks reported on Friday. The partnership will help the custody bank provide digital asset fund administration capabilities for its private funds clients.

That’s it for today’s markets wrap. I’ll see you back here on Monday.

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