Markets Get Choppy

Market Uncertainty. It was a mixed week for risk assets, led by steep losses across the stocks earlier in the week and an end-of-week redemption pump on Friday. What happened this week in markets?

Although U.S. stock markets were closed on Monday in observance of Memorial Day, crypto continued to trade; BTC took a run at establishing new all-time highs, wicking to nearly $70k before proceeding to trade lower throughout the week.

Despite the drawdown, riskier alt coins held their weight, with Bitcoin Dominance finishing Friday unchanged from the prior weekly close, a level set after the metric experienced its second worst week in 2024 catalyzed by widespread acceptance that spot ETH ETFs will receive approval that nullified BTC’s regulatory capture narrative.

Macro appeared to be in the driver’s seat for much of the week, with releases of key global economic data coinciding with major moves in the stock market.

While Germany has been a bastion of growth for the European Union, the nation reported Wednesday that inflation had only increased by a meager 0.1% from April to May, indicating its economy is in decline and on the brink of slipping into deflation.

Revised US GDP estimates for the first quarter of 2024 released Thursday had growth projections lowered, meanwhile estimated corporate profits were slashed from a 3.4% gain to a 1.7% quarter-over-quarter loss. Concerningly, the U.S. GDP Deflator, a measure for the changes in price levels of domestically produced goods and services, which was unchanged from initial estimates of 3.1%, indicating that inflation continued to run hot throughout the first quarter as the real economy contracted.

On Friday morning, risk assets initially popped after U.S. consumer spending data largely met expectations, but fell shortly thereafter after more bad forecasts. Early indications of globally synchronized economic decline did little to deter bulls, however, who feverishly bid stocks into the Friday close.