Financial stocks

Bitcoin Plunges Overnight, 290,000 Liquidated as Global Financial Markets Roil

In the early hours of April 13th, a massive liquidation event hit the cryptocurrency market, with the price of Bitcoin plummeting by over $2,000 within a short period, dropping from a high of $67,100 to below $65,000. According to CoinGlass data, a total of 290,000 individuals were liquidated in the past 24 hours, with liquidations totaling $920 million. This event not only rattled investors but also underscored the volatility and risks inherent in the cryptocurrency market.

Simultaneously, the U.S. stock market also faced significant losses. On Friday, the Dow Jones Industrial Average dropped by 1.24%, the Nasdaq Composite Index fell by 1.62%, and the S&P 500 index declined by 1.46%. Particularly, bank stocks performed poorly, with shares of JPMorgan Chase & Co. (JPM) plunging by 6.43%, marking the largest decline since June 2020. Larry Fink, CEO of BlackRock, the world’s largest asset management firm, anticipates that the Federal Reserve will only cut interest rates once or twice this year, and the Fed will face significant challenges in curbing inflation.

Amid the turmoil in financial markets, gold prices also experienced dramatic swings. Spot gold in London surged by over 2%, reaching a historical high of $2,431 per ounce, but plummeted sharply towards the end of the session to close at $2,343.78 per ounce, down by 1.39%. International oil prices also fluctuated significantly, with New York crude oil futures prices rising by over 3% intraday but ultimately closing up by 0.51%. Meanwhile, the U.S. dollar index surged significantly, rising by 0.7% for the day.

Investors are closely monitoring developments in the Middle East’s tense situation. Recently, several countries including France and India have advised their citizens against traveling to countries such as Israel and Iran. Additionally, U.S. President Biden issued a warning to Iran, urging them not to attack Israel and stating that the U.S. would assist Israel in its defense. These series of events have heightened uncertainty in global financial markets.

In the cryptocurrency market, besides the sharp decline in Bitcoin, other major cryptocurrencies also suffered losses. Ethereum’s decline exceeded 9%, Dogecoin fell by over 13%, and Solana dropped by over 14%. Meanwhile, the U.S. dollar, which has an inverse relationship with Bitcoin prices, surged significantly. The substantial rise in the U.S. dollar index was primarily driven by safe-haven buying and expectations of delayed interest rate cuts.

Against the backdrop of market turmoil and geopolitical tensions, investor sentiment has been severely impacted. Several CEOs have expressed concerns about inflation, and the latest financial reports indicate that even the largest banks are facing higher rate challenges. Key interest income metrics for JPMorgan Chase & Co., Wells Fargo & Co. (WFC), and Citigroup Inc. (C) all saw declines quarter-over-quarter. Furthermore, the broad decline in large financial stocks has further exacerbated market concerns.

Analysts suggest that the current market volatility and Middle East tensions will further influence global financial market trends. They advise investors to closely monitor market dynamics and make prudent decisions to mitigate potential risks. Additionally, governments around the world need to take measures to strengthen market supervision and risk prevention to ensure the stability and sustainable development of financial markets.

Bank Stocks Financial stocks

The US Stock Earnings Season Kicks off This Week

The first-quarter earnings season is set to gradually commence in the US stock market this week, with JPMorgan Chase(JPM), Wells Fargo(WFC), and Citigroup(C) leading the way on Friday. Following suit will be global asset management giant BlackRock(BLK), and Delta Air Lines(DAL).

Despite the impressive performance of US stocks in the first quarter, Wall Street anticipates a relatively lackluster earnings season for American companies. However, analysts expect the “Big Seven” to continue driving profit growth in the US stock market, particularly in the telecommunications and technology sectors. Moreover, with US companies currently boasting record-high levels of cash flow, many firms may announce substantial buybacks and business expansions.

While the S&P 500 index surged by 10.16% in the first three months of the year, Wall Street strategists hold a somewhat pessimistic view regarding the performance of US companies in the first quarter. Expected profit growth for S&P 500 index component companies is forecasted to be the lowest since 2019, standing at just 3.9% year-on-year.

However, this situation could potentially be interpreted as a positive sign. If US companies outperform expectations, it could boost market confidence and fuel further growth. A similar scenario occurred three months ago when companies surpassed fourth-quarter earnings expectations, leading to market gains.

Wendy Soong, a senior analyst at Business Insider, noted, “Traders expect the Federal Reserve to cut interest rates later this year, which could result in stronger consumer spending, economic activity, better profit growth, and higher stock prices.”

Wall Street has outlined five major investment themes to watch during this earnings season:

  1. Continued profit growth led by the “Big Seven” companies, with significant increases anticipated for firms like Apple(AAPL), Microsoft(MSFT), Alphabet(GOOG), Amazon(AMZN), Nvidia(NVDA), Meta(META), and Tesla(TSLA) in the first quarter.
  2. Expected profit growth in the communication services, technology, and utilities sectors, while some sectors like energy, materials, and healthcare may experience profit declines.
  3. Record-high levels of corporate cash flow and free cash flow, potentially leading to increased capital allocation through dividend payments and investments.
  4. Improved operating profit margins, indicating enhanced corporate profitability.
  5. Potential disparity between stock price trends and earnings performance, as indicated by a low correlation index for S&P 500 index component stocks.

In summary, while Wall Street holds a somewhat negative outlook for the upcoming earnings season, potential positive surprises in corporate performance could spur market growth and bolster investor confidence.