Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
A new kid arrived on the cryptocurrency block
Bitcoin’s blockchain – the digital ledger which records every bitcoin transaction – split into two at 08:20 ET Tuesday, in an event know as a ‘hard fork’, creating a competing currency called “Bitcoin Cash”.
Bitcoin Cash initially surged, as some market participants appeared to defect to the newly created cryptocurrency.
The novelty of Bitcoin Cash, however, soon wore off, as the newly created cryptocurrency gave up most of its gains, sliding more than 40% to $205 on Friday while bitcoin continued to adds to gains.
Dollar given a lifeline after US jobs data topped expectations
The U.S. dollar index rose from multi-month lows against a basket of global currencies on Friday, buoyed by data showing the U.S. economy created more jobs than expected.
The U.S. economy created 209,000 jobs in July, handily beating the consensus estimate for the creation of 183,000 jobs.
As was widely expected the jobless rate remained unchanged at 4.3%.
The closely watched wage number was unchanged from previous months, with average hourly earnings up 2.5%. The average work week also was unchanged at 34.5 hours.
Prior to its surge on Friday, the dollar had dropped to its lowest level of the year against its rivals.
Gold spooked amid renewed expectations of fed rate hike
Gold struggled to hang onto gains, snapping a three-week winning streak after the jobs data on Friday topped expectations, easing doubts over whether the Federal Reserve would keep to its plan to raise rates at least once more this year.
"They're stumped. I think they will continue on a path of monetary tightening because they will expect wages will accelerate," Michael Arone, Chief Investment Strategist at State Street Global Advisors said of Yellen and fellow labor economist Fed Vice Chair Stanley Fischer.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
The Dow made history
The Dow Jones Industrial Average jumped above 22,000 on Wednesday, as the last big wave of corporate earnings filtered through markets, ahead of Wall Street estimates, supporting a move higher in the broader market.
A surge in shares of Apple Inc (NASDAQ:AAPL), was the main driver of the Dow’s push above 22,000 as the tech giant confounded expectations for a weak quarter, beating analysts’ expectations on both the bottom and top line.
The rally in the Dow showed no signs of fading, posting a record high close on Friday for the eighth-straight session.
Crude oil futures posted weekly loss
Crude futures settled lower for the week on Friday amid renewed concerns over Opec’s compliance with the deal to curb production, after a survey, earlier this week, showed Opec supplies rose to their highest level of the year so far. That despite the current pact to reduce output by 1.2m barrels per day (bdp).
Opec output hit a 2017 high of 33 million bpd in July, up 90,000 bpd from the previous month, a Reuters survey showed earlier this week, despite the group’s pledge to curb production.
In May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November last year.
Concerns over growing Opec production come ahead of a highly anticipating meeting between Opec members on Aug 7-8, as the group seeks to reaffirm its commitment to increase compliance with the deal to curb production.