4:06pm: Tech stocks, Bitcoin reverse course to varying degrees
The Dow closed Wednesday down 163 points, 0.5%, at 33,989, after being down more than 500 points earlier in the session. The Nasdaq ended 4 points lower at 13,300, and the S&P 500 lost 12 points, 0.3%, to hit 4,116.
Bitcoin, which was down more than 14% to less than $34,000 earlier today, recovered some lost ground as well. As of just after the closing bell, the coin was trading at $40,022.56.
12:12pm: Bitcoin below $40,000 for the first time since February
The Dow was down 333 points, 1%, to 33,727.71 at midday amid a broad market sell-off fueled in part by weakness in the cryptocurrency sector. The Nasdaq dropped 95 points 0.7%, to 13,209, and the S&P 500 declined 35 points, 0.8%, to 4,093.
Bitcoin is in the midst of a major slide. The crypto has shed 14% of its value to $36,804.54 midday Wednesday, the first day the coin has traded for less than $40,000 since February.
“The collapse across the entire realm of Cryptocurrencies has many fearful of the economic implications of such capital destruction,” IG Senior Market Analyst Joshua Mahony said. “With institutions having taken a more keen role over this latest bull-run, the repercussions of another extended crypto-capitulation could be more widespread compared with 2018. For some, the institutional involvement in Bitcoin has helped bolster the case for its future inclusion as a mature asset class. However, that institutional involvement could ultimately result in greater regulation if its collapse sparks a wider fallout for financial markets.”
9:45am: Proactive North America headlines:
Canada Silver Cobalt Works Inc (CVE:CCW) (OTCMKTS:CCWOF) updates on strategic developments at its Cobalt Camp assets in Ontario
Atlas Engineered Products (CVE:AEP) (OTCMTS:APEUF) records 1Q net profit on double-digit revenue increase
Klondike Gold Corp (CVE:KG) (OTCPINK:KDKGF) (FRA:LBDP) begins first phase of 6,500 metres drill program at Klondike District gold project, Yukon
Victory Resources Corporation (CSE:VR) (FRA:VR61) (OTCPINK:VRCFF) says assays pending after it sinks ten holes for 496 metres at Loner
Talon Metals Corp (TSE:TLO) (OTCMKTS:TLOFF) (FRA:TAO) finds thick pool of massive nickel-copper mineralization at CGO West area on the Tamarack project
9:37am: Wall Street lower
The main indices on Wall Street started Wednesday’s session in the red as a general slump in stock markets continued.
In the early minutes of trading, the Dow Jones Industrial Average was down 1.19% at 33,649, while the S&P 500 dropped 1.26% to 4,075 and the Nasdaq fell 1.47% to 13,108.
The one thing that may be able to change the market’s direction are the latest minutes from the Federal Reserve which are due to be released later today.
7:50am: Wall Street set to start lower
Markets on Wall Street are set for another decline at the opening bell, ahead of the minutes of the last Federal Reserve meeting.
The Dow Jones Industrial Average futures are suggesting a 258 point or 0.77% drop as inflation fears continue to grip investors.
The S&P 500 is forecast to fall 0.92% at the open, while the tech-heavy Nasdaq Composite is set for a 1.3% drop.
The minutes of the Federal Open Market Committee meeting in April are due to be released at 7m BST and will be scrutinised for the central bank’s view on pricing pressures, and for suggestions as to when its market-supporting bond-buying programme might start to be eased up.
However, the minutes will have a rather historic feel to them, given the meeting came before a surge in inflation and poor US jobless figures.
And since then, Fed officials have been – mostly – keen to present a dovish view, suggesting the current rise in inflation is transitory and will ease once last year’s comparative weakness caused by the pandemic has worked its way through the system.
Sophie Griffiths, market analyst at Oanda, said: “Inflation fears and concerns surrounding the timing of the Fed’s next move have been stalking the markets for weeks. While Fed speakers have been out in droves reiterating its dovish stance, the market looks undecided. Some days, the markets are prepared to take the Fed at their word. Today is not one of those days. The markets are clearly nervous about what the FOMC could reveal…
“However, it is worth pointing out that the meeting was held before last week’s shock inflation read and the weak non-farm payroll and retail sales data. This really makes them quite out of date. Even so, the markets are not focused on that, and the minutes will be scrutinised for clues as to when the central bank might start tapering its bond purchases.”
Michael Hewson at CMC Markets said: “The Fed.. believes that the recent increase in inflationary pressures is likely to be transitory, and should fall back as the year progresses as base effects fall away.
“This would suggest that the Fed appears to be on autopilot through the summer; however the recent sharp rise in commodity prices, along with significant base effects appears to be creating some uncertainty given the recent sharp rise in inflation expectations.”
Three things to watch for on Wednesday:
- Companies in the earnings diary today include telecoms group Cisco Systems Inc (NASDAQ:CSCO) and TJ Maxx owner TJX Companies Inc (NYSE:TJX)
- Shares in DIY retailer Lowe’s Companies Inc (NYSE:LOW) and retail chain Target Corp (NYSE:TGT) will be in focus after both companies reported quarterly earnings ahead of the open
- Bitcoin is also back in the headlines after a warning on crypto payments from Chinese regulators sent the value of the digital currency tumbling
Story by ProactiveInvestors
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