Equities Trade Sideways Amid Tapering Talk: Markets Wrap

“There are risk-off money flows across asset classes as investors fear that central banks are poised to tighten policy into a global economic slowdown this fall,” said Tom Essaye, President of Sevens Report Research.

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Blockworks exclusive art by BY AXEL RANGEL

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key takeaways

  • Galaxy Digital partnered with Bloomberg to launch a new institutional DeFi fund
  • JPMorgan and Wells Fargo are both set to launch passive bitcoin funds, SEC filings revealed

Equities were mixed as investors assessed inflationary concerns and remarks from Federal Reserve officials on Thursday. Fed officials said tapering back bond purchases may start as early as this year, FOMC minutes Wednesday indicated. Many meeting participants “saw benefits in reducing the pace of net purchases of Treasury securities and agency mortgage-backed securities proportionally,” the minutes revealed.

In major Wall Street indices, big market winners include massive retail chain Macy’s Inc. whose shares jumped 22.8% mid-day. 

Equities

  • The Dow was down -0.19% to 34,894.
  • S&P 500 advanced 0.13% to 4,405.
  • Nasdaq was up 0.11% to 14,551.

Insight

“There are risk-off money flows across asset classes this morning as investors fear that central banks are poised to tighten policy into a global economic slowdown this fall,” said Tom Essaye, President of Sevens Report Research, in a note. “This week’s options expiration is likely amplifying the volatility this morning.”

S&P. 500, The Dow Jones Industrial Average and Nasdaq Composite trading year to date. Source: TradingView

Bitcoin and ethereum traded flat on Wednesday following a mixed bag of crypto-related institutional news, advancing roughly 5% on-day.

JPMorgan Chase and Wells Fargo are both set to launch passive bitcoin funds, SEC filings on Thursday revealed. Both banks will be partnering with NYDIG, signaling further institutional adoption for cryptocurrencies, Blockworks reported.

Former SEC chair Jay Clayton joined Fireblocks advisory board, where he will help the company understand traditional markets infrastructure and how digital assets can best fit in the existing system, Blockworks reported.  Clayton, who served as chairman from 2017 to 2020, told Blockworks that digitization “is going to come to many of our processes, it’s going to enable new products, like some of the crypto assets you see, but it’s also going to add efficiencies and resiliency to more traditional forms of finance.”

In other news, the Security Exchange Commission (SEC) could look to regulate DeFi projects in the future, Blockworks reported. SEC Chairman Gary Gensler said that DeFi projects that reward participants with digital tokens could be considered as necessary activity to be regulated, according to the Wall Street Journal. The Chairman said that “the American public is buying, selling, and lending crypto on these trading, lending, and DeFi platforms, and there are significant gaps in investor protection.”

In other price action, cardano and polkadot both made made gains of over 12% on Thursday.

DeFi

  • Uniswap is trading at $27.43 with a total value locked of $4,765,744,171 up 3.4% in 24 hours at 4:00 pm ET. 
  • Chainlink is trading at $26.79, advancing 4.1% with trading volume at $1,466,243,034 in 24 hours at 4:00 pm ET.
  • DeFi:ETH is 33.4% at 4:00 pm ET.

Crypto

  • Bitcoin is trading around $46,504.48, up 4.4% in 24 hours at 4:00 pm ET.
  • Ether is trading around $3,150.24, advancing 4.72% in 24 hours at 4:00 pm ET.
  • ETH:BTC is at 0.067, up 0.44% at 4:00 pm ET.
  • VIX is down 0.19% to 21.52 at 4:00 pm ET.

Commodities

  • Brent crude fell to $67.71 per barrel, declining -1.88%.
  • Gold was up 0.02% to $1,786.20.

Fixed Income

  • US 10-year treasury yields 1.242% as of 4:00 pm ET.

Currencies

  • The US dollar strengthened 0.46%, according to the Bloomberg Dollar Spot Index.

In other news…

Galaxy Digital launched a new institutional decentralized finance (DeFi) fund, partnering with Bloomberg to announce their fourth index together. However, this time the fund will focus on the DeFi space, Blockworks reported. The index will include tokens like Aave, Maker, Compound, Uniswap and Sushi.

We’re watching out for…

  • Hours of wage and salary workers on non-farm payrolls will be on Friday.

That’s it for today’s markets wrap. I’ll see you back here tomorrow.

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