(Bloomberg) – U.S. stocks have been mixed after investors were partially surprised by the volatility of trading in high-risk assets such as Bitcoin amid lingering concerns about the outlook for inflation. Oil rose for the first time in four trading sessions.
The S&P 500 was little changed after erasing previous gains when Philadelphia Fed Chairman Patrick Harker said the central bank should talk about cutting bond purchases as soon as possible. The high tech Nasdaq 100 finished lower, while the Dow Jones Industrial Average gained as investors shifted from growth to value favorites like Boeing. Bitcoin resumed selling on Friday after China reiterated a warning that it intended to crack down on cryptocurrency mining as part of an effort to control financial risks.
âFor people to say that Bitcoin shouldn’t influence stock prices in the short term is crazy,â said Tom Essaye, a former Merrill Lynch trader who founded âThe Sevens Reportâ newsletter. âWe live in a 24/7 market and at least in the short term it’s run by algorithms and they all trade the same things. When you get a negative headline you will see everything sell. “
European stocks rallied earlier on the prospect of easing lockdowns and as services data signaled a recovery. Asian shares were mostly higher, although they slipped in China.
Treasury yields were little changed and the dollar gained. Gold fell from its highest level in more than four months.
China has long expressed its displeasure with the anonymity provided by Bitcoin and other crypto tokens, and warned earlier in the week that financial institutions were not allowed to accept it as payment. China is home to a large concentration of the world’s crypto-miners, programmers who use massive computing power to verify transactions on the blockchain.
The global economic recovery, the risk of a significant upturn in inflation and outbreaks of Covid-19 in parts of the world continue to shape market movements. Stocks have been volatile this week, with speculative ardor cooling down as minutes from the last Fed meeting signaled the possibility of a debate at some point on reducing stimulus measures. Still, better-than-expected jobless claims data on Thursday supported sentiment.
âInflation fears and concerns about the Fed’s tightening monetary policy appear to have eased,â said Fiona Cincotta, senior financial markets analyst at City Index. “The impact of the FOMC minutes where the Fed has indicated its willingness to start talking about declining asset purchases appears to have been short-lived.”
Elsewhere, oil eased its biggest weekly drop since March. In Europe, jewelry maker Cartier Richemont gained after posting above-estimated sales.
Click here for today’s MLIV question: How should markets price in an aging China?
Here are some key events from this week:
- Eurozone finance ministers and central bank heads hold informal meeting. A larger group of EU finance ministers and central bank chiefs to meet on May 22
Here are some of the main movements in the markets:
- The S&P 500 was little changed at 4:01 p.m. New York time
- The Nasdaq 100 fell 0.6%
- The Dow Jones Industrial Average rose 0.4%
- The MSCI World Index has changed little
- Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.3% to $ 1.2187
- The British pound fell 0.2% to $ 1.4155
- The Japanese yen fell 0.1% to 108.90 per dollar
- The yield on 10-year treasury bills was little changed at 1.62%
- Germany’s 10-year yield fell two basis points, more than any closing loss since May 4
- Britain’s 10-year yield was little changed at 0.83%
- West Texas Intermediate crude rose 3.1%, highest since April 14
- Gold futures fell 0.1% to $ 1,882 an ounce, ending a six-day streak
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