Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow
1. US Treasury Rally Fear Overblown?
US stocks fell sharply on Tuesday as the rise in the U.S. 10Y Treasury yield above 3% spooked equity investors. Yet, some analysts remained adamant that the slump in equities on the back of rising bond yields was somewhat of an overreaction.
US Treasury 10-year yield above 3% is not enough to end the secular bull equity market, according to financial services firm Raymond James.
Rates, although rising, are still very low and investors are going to have to own stocks to have any hope of meeting their long-term return goals, said Raymond James.
Still, rising bond yields do pose a threat to certain areas of the equity market: High-dividend stocks.
Investors had sought dividend-heavy stocks, or bond proxies, during recent years as government bonds offered paltry yields but with bonds yields on the rise investors are expected to shun sectors such as utilities, real estate, and telecom.
Earnings will also be focus on Wednesday amid quarterly reports from a raft of companies including Facebook (NASDAQ:FB), Boeing (NYSE:BA), Visa Inc (NYSE:V), AT&T (NYSE:T) and eBay Inc (NASDAQ:EBAY).
The Dow Jones closed 1.74% lower at 24,024.13 on Tuesday.
2. Traders Eye Second-Straight Weekly Draw in US Crude Supplies
Inventory data from the Energy Information Administration (EIA) on Wednesday is expected to show a second-straight weekly draw in U.S. crude stockpiles.
Analysts forecast crude inventories fell by about 2.0 million barrels in the week ended April 20.
Investors on Tuesday appeared to cut their bullish on Middle East supply disruptions after Trump hinted that the U.S. and France were nearing an agreement to preserve the Iran nuclear deal.
Crude oil futures settled 1.4% lower at $67.70 a barrel.
3. Bitcoin $10,000 Eyed
Bitcoin rose to a more than one-month high on Tuesday as ongoing upbeat sentiment on cryptos and fading fears of regulatory pressures kept demand steady.
The rally in bitcoin since its slump on April 1 to $6,432.4 has lifted investor expectations that the popular crypto was set to test a key psychological level of $10,000.
“After fighting regulation headwinds and tax selling, the path of least resistance is higher, and I believe the sector still has much more upside in the long run,” President of Blue Line Futures Baruch told CNBC. “The ultimate upside is $11,500 to $11,800.”
Renewed investor demand for cryptos has been evident by a resurgence of inflows into the crypto space as the total cryptomarket cap has nearly doubled to about $432 billion in just under two weeks.