Markets barreled ahead last week to close in record-high territory. Is recent volatility expected to stay in the rear-view mirror?
Monday
S&P 500 1.02% | NASDAQ 1.23%
Markets opened higher after last week’s gains. There was a swing in sentiment through the close as renewed hopes of a “deal” in Iran sent equities higher. The global economy has shielded itself so far in April from volatility that was the norm in March.
Tuesday
S&P 500 1.18% | NASDAQ 1.96%
Tech stocks sprinted out of the gates on Tuesday and Producer Prices declined in March. Bank stocks reported decent earnings primarily due to trading revenue in the first quarter. Banks will be under the microscope, specifically with corporate debt in a stagnant rate environment.
Wednesday
S&P 500 0.80% | NASDAQ 1.59%
Bank earnings rolled in yesterday and again on Wednesday reflecting confidence in the consumer credit space. If consumers brush off elevated energy costs, a seasonal boost coming out of winter could push the pedal down further. The S&P500 closed in historical territory, above 7,000 for the first time helped by the Magnificent 7.
Thursday
S&P 500 0.26% | NASDAQ 0.36%
Stocks continued their record climb as initial jobless claims fell lower than expected as a thumbs up for jobs. Earnings reports from Netflix (NFLX) were strong and semiconductor names helped equities surge higher. News outlets also reported a deal could be in the works with the conflict overseas.
Friday
S&P 500 1.20% | NASDAQ 1.52%
Markets vaulted higher after the announcement of a 10-day truce between Israel and Lebanon. The news was followed by the opening of the Strait of Hormuz which sent oil prices plummeting. The S&P 500 and NASDAQ closed at all-time highs, finishing the hottest weekly winning streak since last November.
Conclusion
S&P 500 4.54% | NASDAQ 6.84%
Equities started off the initial phase of corporate earnings season with a bang. The ongoing speculation in Iran on a deal that would open the Strait of Hormuz materialized. Corporate earnings season has been a welcome distraction to the speculative movements in highly volatile sectors such as energy. This week showed that sentiment has improved meaningfully in the last 3 weeks. The direction of markets appeared to be undeterred and could lead to some stability as earnings rolled in. Any pressure on earnings has yet to show itself at this point which has stabilized markets. Consumers are still spending and retail sales data next week will show if there have been any signs of that slowing.
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