Market Wrap: tech giants take a backseat to one more crypto fiasco

Annie Charalambous, Friday, 23 April 2021

ETX Capital Market Wrap

With so much overlap between markets, we've merged our Week Ahead and Week in Review posts into one bigger market digest: we're recapping the events that dominated headlines and rattled markets, and outlining the ones to watch in the week to come.
 

On the stock market front, tech earnings trickle in and Apple hosts its first event of 2021

FAANG results kicked off with Netflix's first-quarter earnings – despite year-on-year growth across all fronts, new subscriber growth slowed in Q1, falling over 2 million users short of expectations. Shares tanked as much as 11% in after-hours trading, and settled at -8% in the next trading session.

IBM and Intel also published their latest results, beating estimates. First up, IBM saw 18% growth in cloud services revenue YoY, and have made a dent in lowering debt amassed when the company acquired Red Hat in 2019. Intel posted an earnings beat, but weaker-than-expected data-centre results sent shares falling slight. YTD, IBM is +12% and INTC +25.5%.

Apple's latest event – its first of the year – came with the news of a next-gen iPad, a purple iPhone 12, Podcasts Subscriptions, and AirTag tracking devices. The company is due to post its quarterly results in the next week, alongside Amazon, Tesla, and hundreds more.
 

🔺🔻 Movers and Shakers

  • Equifax (EFX) soared almost 15% Thursday on strong earnings. Read more on MarketWatch
  • Dow Inc. (DOW) tanked 6% Thursday, despite strong earnings. Full story via The Street
     

Looking at FX markets, crypto steals the spotlight again

During the course of this week, the British pound has been steadily climbing, with investor confidence bolstered by British government talks with the European Union over the post-Brexit trade position of Northern Ireland. It was further aided by the rollercoaster ride that was the sudden unveiling of a European Super League which was supposed to include the elite clubs of Europe and Great Britain, only to be discontinued just three days later.

Our own Andrew Saks, Head of Research and Analysis, took a closer look at this story here

Football is such a massive contributor to the British economy that shares in publicly listed clubs such as Manchester United rallied and then settled back to the same position that they were at last week, and all eyes were on the GBPUSD pair as JPMorgan, a Tier 1 FX dealer that has a huge, vested interest in football licked its wounds from its scuppered speculation.

Now, as this week comes to an end, the strong fiat currency position and steady climb of the Pound against the US Dollar may well be contrasted by volatility in cryptocurrency against major fiat counterparts. News this morning that Turkish cryptocurrency exchange Thodex, run by 27 year old chancer Faruk Fatih Ozer from its Istanbul base, has gone west – literally.

Mr Ozer has run away, and is currently being hunted down by Turkish authorities, leaving behind losses of an estimated $2 billion as the cryptocurrency exchange sharply followed the footsteps of other failed digital venues such as Mt. Gox almost to the letter in amassing client investments in fiat money, converting them to cryptocurrency, waiting for a boom in the market and then packing up and running away.

Related: For a deep-dive into this story, read our most recent blog post

There is no recourse for investors if a crypto exchange decides to close down. Today, Bitcoin is down over 7,000 USD compared to its position on Wednesday, and stands at 48,182 BTC to the US Dollar, compared to an astonishing 55,000 on Wednesday this week.

Turkey has experienced a huge boom in cryptocurrency investing over the past week, with the volume of cryptocurrency trading having increased threefold over that of just seven days earlier. An ideal opportunity for the nefarious to up sticks during a boom and make for the horizon.

Thus, looking into next week, a clear week in terms of geopolitics, a more mobile British economy and a steady North American outlook means that the major currencies may well be steady against each other, but volatility may prevail when it comes to pitting them against cryptocurrency.
 

Mark your Economic Calendar

  • Next week's announcements begin in Japan on Monday, April 26th, when the monthly Coincident Index is released at the same time as the Leading Index, which is expected to be 1.3% down on last month. In Europe, the German Business Climate Index is expected to be announced at 9 am BST, which is forecast at 93.0 as opposed to 94.0 last month. More Bill and Note Auctions are set to take place as the US markets begin to open, with very steady upward trends for all of the US bills predicted over 3-month, 6-month and 2-year periods.
  • On Tuesday, the Bank of Japan is set to hold a press conference and release Core CPI information on a year-on-year basis, and at 4 am UK time, the Italian Business Confidence and Italian Consumer Confidence indexes are looking to show a slight increase over those of last month to 101.2 and 100.9, respectively. In the US, the House Price Index is predicted to demonstrate a 12-point rise over last month, a metric that will be released at 9 am on Tuesday.
  • Wednesday is set to reveal a drop in crude oil imports affecting the US Dollar, with a change of 0.416 million barrels, followed at 7pm UK time by an announcement on the interest rate decision by the Federal Reserve Bank.
  • Thursday is a national holiday in Japan, however other markets are subject to some interesting announcements. Unemployment in Germany is set to be announced at 2.745 million.
  • Friday, April 30th heralds an interesting set of announcements, with the Euro being in focus as Germany announces its quarterly GDP for the first 3 months of this year. It looks set to be down 0.3% on a quarter-on-quarter basis, and down 2.7% on a year on year basis. France will also announce its GDP just half an hour earlier at 1:30 am for the first quarter of 2021, where it is anticipated that a drop of 1.4% will be demonstrated

 

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