Here's What's Happening in Markets: April 17

Markets wavered between green and red Wednesday as investors looked for optimism in corporate earnings after Fed Chair Jerome Powell's comments about rate cuts left them downbeat. 

SPY, the SPDR S&P 500 ETF Trust and DIA, the SPDR Dow Jones Industrial Average ETF Trust both flipped to higher from slightly lower midmorning, while QQQ, the Invesco QQQ Trust which mirrors the tech-heavy Nasdaq, dipped further than the other broad exchange-traded funds. Investors pulled money from SPY and DIA yesterday and QQQ experienced inflows of cash. 

Investors looking to snap a losing streak in the market were hit with a dose of pessimism on Tuesday by Fed Chair Powell at an event on the Canadian economy. Powell noted a "lack of further progress so far this year on returning to our 2% inflation goal" in his remarks, torpedoing hopes that the Fed would start cutting interest rates any time soon.

According to the CME Fed Watch Tool, traders aren't forecasting rate cuts until September, with a nearly 100% bet on holding rates steady at the Fed's May policy meeting.

Fixed income traders have been taken on a ride this year by the "higher for longer" rate environment. Most investors started off the year believing the Fed would cut rates half a dozen times—a belief that quickly dissipated in the first quarter. Bond yields, which were on the rise in previous days, fell on Wednesday, with the benchmark 10-year sliding to roughly 4.64%.

TLT, the iShares 20+ Year Treasury Bond ETF was also in the green on Wednesday as bond prices rose. Bond prices have an inverse relationship to yields. 

Despite Powell's comments, earnings from megacap companies (companies with market capitalization of roughly $200B or more) injected optimism into the markets Wednesday. 

United Airlines Holdings Inc. announced both earnings and revenue beats, while the airline maintained its economic forecast for 2024. Shares for the company jumped more than 10% Wednesday after the strong earnings report. JETS, the U.S. Global Jets ETF which holds major airline companies in the U.S. and abroad, gained 2.5%.

It's a nice boost for airline investors, who have seen performance in the airline industry underperform the broader market year to date.

JETS YTD 

Source: etf.com

And for cryptocurrency investors, a surge in bitcoin might be coming. The bitcoin halving, an event where rewards for bitcoin mining is cut in half is likely set to happen this week. The event reduces the amount of bitcoin supply in the market, increasing its scarcity. In the past, the halving event has usually preceded a large bitcoin rally. 

It's the first halving event after the launch of spot bitcoin ETFs in the beginning of the year and may provide a buying opportunity for crypto investors. 

Blackrock's IBIT, the iShares Bitcoin Trust was in the red Wednesday, slipping more than 2.7% in advance of the halving. The fund has seen huge inflows since its launch, raking in $15.3 billion since January, according to etf.com data. The fund has gained nearly 45% since it began trading. 

IBIT Total Returns 

Source: etf.com

While crypto may rally in the coming weeks, this year's halving comes as bitcoin prices have hit new highs, potentially limiting further gains in bitcoin and the spot ETFs that track the digital currency.