Stocks Soar on Eve of Bank Earnings While Crude Oil and Bitcoin Slide: Markets Wrap

Major equities saw gains ahead of big bank earnings and key inflation data this week, leaving investors assessing future economic growth and allocating capital to Wall Street’s major indices. The S&P 500 and Dow Jones Industrial Average hit fresh highs.

Financial shares landed big gains including Morgan Stanley, Goldman Sachs and JPMorgan. All advancing more than 2% intraday. The tech-heavy Nasdaq slightly advanced. Leaders include Tesla and Google’s parent company, Alphabet. All gauges landed in the green by market close.

In global markets, Stoxx Europe 600 made gains for two trading sessions in a row.

In the S&P 500, oil has struggled as of late. Valero Energy Corporation (VLO) was down with an intraday low of $70.62. Other energy stocks were in the red too, along with Phillips 66, Holly Frontier, and Marathon Petroleum. Phillips 66 shed 5.92%. HolyFrontier fell 2.82% and Marathon Petroleum declined 2.82% intraday.

Equities

• The Dow rose to 34,996, adding 0.36%
• S&P 500 advanced 0.37% to 4,376
• Nasdaq was up 0.21% to 14,773

Insight

Director of Energy at Mizuho Securities, Robert Yawger, weighed in on certain equities underperforming, such as Valero Energy, who he says “was the second-worst performing name in the S&P 500 last week.”

“Generally speaking, refiners tend to do quite well in a positive Gasoline Crack environment, but the big S&P 500 names have struggled as of late,” Yawger said in a note. “Valero was even down on Thursday after the big Gasoline demand number.  How is that possible? They make Gasoline…customers apparently want more Gasoline in the US than at any other time in history.”

Last week’s performance of Valero Energy Corp. Chart: TradingView

Bitcoin teeters and continues its lull as Ethereum follows suit, potentially indicating a period of consolidation for the crypto markets.

This comes the weekend after a string of bullish news for the digital asset class-at-large which includes Square’s announcement of a bitcoin hardware wallet, along with IPO plans from Circle and Bullish.

Crypto

• Bitcoin is trading around $32,799.55, down -3.05% in 24 hours at 4:00 pm ET
• Ether is trading around $2,019.34, shedding -5.10% in 24 hours at 4:00 pm ET
• ETH:BTC is at 0.0615, down -1.57% at 4:00 pm ET
• VIX shot up 0.87% to 16.32 at 4:00 pm ET

Insight

“After a 50% correction across the Crypto markets we are in a consolidation mode which is healthy for the next bull run. If bitcoin holds support at 30k through the summer I think we are poised for a great Q4 rally,” Permission.io CEO Charlie Silver said in a note.

Treasury yields advanced as the U.S. sold $58 billion of three-year notes.

Fixed Income

• The US 10-year yields 1.37% as of 4:00 pm ET

Commodities

• Brent crude is down to $75.27 a barrel, declining -0.32%
• Gold is up 0.02% to $1,802.30

Currencies

• The US dollar is up 0.12%, according to the Bloomberg Dollar Spot Index

In other news…

Fidelity’s digital assets arm is looking to up its headcount, adding 100 new staff, and expanding its offerings as institutional investors continue allocating more to cryptocurrencies.

Insight

“The fact that Fidelity is expanding its crypto team signals that demand is rising more broadly to the blockchain sector as a whole,” Barry Finkelstein, head of business development at Algorand, told Blockworks. “All signs point to more asset managers getting involved.”

We’re watching out for …

• JPMorgan, Goldman Sachs and Morgan Stanley are among large financial institutions beginning the US earnings season this week
• Federal Reserve Chair Jerome Powell will deliver remarks on a Monetary Policy Report before the Senate Banking Committee to congress on Thursday
• Bank of Korea’s monetary decision will be on Thursday

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