The Daily Breakdown takes a look at the crypto rally leading risk-on assets higher, while oil enjoys a fresh breakout to multi-year highs.
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What’s Happening?
Cryptocurrencies helped lead yesterday’s rally — and are trying to extend those gains this morning — as Bitcoin jumped 6.4% to a one-month high, Ethereum climbed 7.3%, and Dogecoin rallied more than 10%. That strength helped lift US stocks, too: the S&P 500 gained 0.8%, the Nasdaq 100 rose 1.5%, and the Russell 2000 rallied 1%.
Mixed Reactions
The recent round of volatility has hit some assets harder than others — and the market’s reaction hasn’t exactly followed the script that some may have expected. Despite their defensive reputation, gold is down more than 2% this week, and bonds are lower as well. Meanwhile, even though tech has lagged this year, the Nasdaq is actually positive for the week. And prior market leaders like South Korea, the United Kingdom, Mexico, and Australia — visible through ETFs like EWY, EWU, EWW, and EWA — have all taken a step back over the past few days.
What’s Ahead
Costco, Marvell Technologies, and Gap report earnings tonight. On Friday morning, we’ll get the monthly jobs report, including the updated unemployment rate and the latest read on how many jobs were added (or lost) last month. According to Bloomberg, consensus expectations call for 55K jobs to be added to the economy. We’ll also get the January retail sales report. Both reports will be released at 8:30 a.m. ET.
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Chart of the Day — Oil ETF
With this week’s geopolitical developments, oil and energy stocks have been in focus. While the energy sector ETF — the XLE — is in the midst of a 10-week rally, the USO ETF that focuses on oil just enjoyed a massive breakout. Oil prices are being driven by headlines out of the Middle East, making this a very difficult — and often erratic — trade.
Options
Investors who are bullish could consider calls or call spreads as one way to speculate on further upside, while bearish investors could consider puts or put spreads to speculate on a further move to the downside. For options traders, it may be advantageous to have adequate time until the option’s expiration.
To learn more about options, consider visiting the eToro Academy.
What Wall Street’s Watching
AVGO
Shares of Broadcom are up about 7% this morning after the company beat first-quarter earnings and revenue estimates. Further, second-quarter revenue guidance and profit margin came in above expectations, while AI revenue doubled year over year to $8.4 billion. CEO Hock Tan said Broadcom has a “line of sight to achieve” AI revenue in excess of $100 billion in 2027. Check out the chart for AVGO.
TTD
After a brutal stretch, shares of The Trade Desk are enjoying a strong pre-market rally of roughly 20%. That follows reports the company has held early discussions with OpenAI about helping sell advertising on the ChatGPT platform. Adding to the intrigue, co-founder and CEO Jeff Green made a notable insider buy, purchasing $148 million worth of stock, according to SEC filings. Dig into the fundamentals for TTD.
AAPL
Apple is in focus this week after the company nearly halved the entry price to its Mac lineup, unveiling the $599 MacBook Neo. The launch caps a three-day hardware blitz that also refreshed the iPhone 17e, iPad Air, and the full MacBook Pro line. It’s also Apple’s clearest push in years to take on Chromebooks and entry-level Windows laptops in classrooms and among first-time buyers. The average analyst price target for AAPL is $306, implying over 16% upside.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.