The U.S. stock market was shaken lower again on Friday for the second straight week, with a volatile pattern expected to continue next week as bitcoin’s heavy losses hurt investors’ appetite for all risky assets.
The three major U.S. stock indexes started Friday with what appeared to be a continuation of Thursday’s gains, but investors began selling off technology and growth stocks around noon, and bitcoin turned lower at the same time. Bitcoin fell another 12% after China’s Vice Premier Liu He announced a crackdown on bitcoin mining and trading on Friday.
The S&P 500 index fell just 0.1% on Friday and 0.4% for the week, supported by value stocks such as financials and energy stocks. The Nasdaq Composite Index also fell 0.5% Friday; the Dow Jones Industrial Average rose 0.4%. For the week, the Dow Jones fell 0.5%, while the Nasdaq rose 0.3%, ending four consecutive weeks of decline.
Dragged by technology stocks, the Philadelphia Semiconductor Index fell 0.5% on Friday, TSMC ADR fell 1.3%.
Investors pointed out that the U.S. stock movements are erratic, which can be seen in the face of economic reheating or even possible overheating, triggering the threat of inflation, and in the growth stocks, cryptocurrencies and other assets forming a bubble, the market is showing weakness.
Surly Henderson director O’Connor (Paul O’Connor) said: “The whole pulse of this week is that the market is tired. Stocks continue to lose momentum, and the speculative area of the market is losing momentum.”
Peter Boockvar, investment director at Bleakley Advisory Group, said, “It’s interesting to see that the market is being overrun by the bitcoin move.” Bitcoin plunged 30 percent to around $30,000 at one point on Wednesday, back to $42,000 before plunging again on Friday to wander between $36,000.
Bukwa said, “Bitcoin is the poster child for risk appetite, and this situation tells everyone that if it is dragged down by Bitcoin, the stock market is also in jeopardy.”
In addition to the bitcoin market, the most important thing to watch in the U.S. next week is economic data on personal income and consumption, including the personal consumption expenditure price index, which the Federal Reserve Board (Fed) prefers to reference.
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