Investing.com – Top 5 things that rocked U.S. markets this week
1. Earnings Bonanza Fails to Prevent US Stocks From Weekly Slide
Apple Inc (NASDAQ:AAPL), Tesla Inc (NASDAQ:TSLA), Snap Inc (NYSE:SNAP), Spotify Technology SA (NYSE:SPOT) and Alibaba Group Holdings Ltd (NYSE:BABA) were a few of the notable names that reported quarterly earnings this past week, attracting the bulk of investor attention.
Apple Inc (NASDAQ:AAPL) eased investor concerns after posting quarterly earnings that topped Wall Street top estimates, and revealed iPhone sales numbers that were not as bearish as many had feared.
Yet, the best was saved for the final trading day of week as Apple’s stock hit all-time highs amid reports Warren Buffett increased his stake in the iPhone maker.
Tesla’s earnings call, meanwhile, drew more attention than its quarterly report – which showed a record first-quarter loss – after CEO Elon Musk refused to answer a raft of 'bonehead questions' from analysts. Tesla Inc (NASDAQ:TSLA) fell sharply following the earnings call.
Quarterly earnings reports from both Snap and Spotify failed to impress Wall Street, triggering a sharp selloff in both shares.
Alibaba Group Holdings Ltd (NYSE:BABA), meanwhile, ended the week strongly, closing 3.5% higher after revealing bumper revenues that topped consensus estimates.
The S&P 500 and Dow Jones posted a weekly loss.
2. Crude Oil Prices: Up, Up and Away
Crude oil prices settled at three-and-a-half-year highs on Friday, riding a wave of bullish bets on the U.S. imposing new sanctions on Iran next week, raising the potential for tighter global crude stockpiles.
U.S. President Donald Trump is widely expected pull out of the Iranian nuclear on May 12, leading to the re-imposition of secondary sanctions on Iran, pressuring countries to cut their purchases of Iranian crude.
Focus on the prospect of lower global supplies has dominated flows in oil prices this week, overshadowing a second-straight weekly build in U.S. crude supplies amid an ongoing expansion in output.
On Friday U.S. crude futures rose 1.89% to settle at $69.72 a barrel.
3. Full Steam Ahead: Dollar Hits Highs
The dollar added to last week’s gains on its way to its highest level of the year underpinned by the prospect of further rate hikes and a slump in the both the pound and euro.
The greenback navigated its way through a raft of top-tier economic data including a widely expected unchanged Federal Reserve interest rate decision and a mixed U.S. jobs report.
The U.S. economy created 164,000 in April, missing economists’ forecast of 189,000, while wage growth also fell short of expectations despite a steeper than expected decline in the unemployment rate.
The Federal Reserve left interest rates on hold on Wednesday but signalled that inflation was nearing its 2% target, cementing the prospect of a June rate hike.
Both GBP/USD and the EUR/USD were largely supportive of the dollar rally this past week, after both pairs posted a third weekly loss in a row.
The dollar traded close to year-to-date highs against a basket of major currencies on Friday.
4. Sell Gold in May and Go Away?
Gold prices made a tame start to May, falling for the third-straight week as demand fell in the wake of a stronger dollar and limited safe-haven demand.
Gold prices struggled to attract safe-haven bids despite the prospect of new U.S. sanctions on Iran, and renewed focus on U.S.-China trade after a U.S. financial delegation left Beijing without making any big breakthroughs following trade talks.
5. Bitcoin: Traders Ready to Bet the ‘Next Guy Pays More’
Following its best start to the year in April, bitcoin continued to tease further inflows as it eyed another crack at a key $10,000 price level.
The recent turn in sentiment on cryptocurrencies emerged as traders appeared willing to hold, or “hodl” bullish bets, underpinning a move in bitcoin on Friday to a nearly two month high of $9,875.
Traders pointed to signs of institutional demand for the popular digital currency as a supportive factor amid reports that Goldman Sachs was on the cusp of opening its bitcoin trading operation.
The Wall Street bank’s first ever "digital assets" division, spearheaded by trader Justin Schmidt, reportedly will begin operations within the next few weeks.
This added to expectations for a ramp up in institutional demand after famed investor George Soros was reported to be eyeing an entry into the market last month.
But as institutional demand for bitcoin heats up, the popular crypto continued to attract its fair share of detractors.
Legendary investor Warren Buffet claimed recently bitcoin investors were making a “gamble,” not an investment as their rationale for investing was mainly based on “hoping the next guy pays more.”
Institutional demand is widely seen as a crucial step to legitimise bitcoin as an asset class capable of competing with traditional assets for a space in institutional investors’ portfolios.
Over the past seven days, Bitcoin rose 5.96% on the Bitfinex exchange, Ethereum rose 18.08%, while Ripple XRP rose 7.34% on the Poloniex exchange.