Stocks pause before earnings rush

  • Stock market dips a tick in more sideways trading
  • Defensive sectors up, communications services and energy down
  • This week: GDP, “big” earnings, Fed inflation

Who knows, maybe the market is waiting for this week’s numbers. Or next week’s.

As traders get ready for a flood of key economic data and high-profile earnings, stocks are coming off another week of doing a whole lot of nothing. The S&P 500 (SPX) moved less than 1% for the third week in a row—the longest such streak since August 2021. This time, the SPX ended the week slightly in the red:

Chart 1: S&P 500 (SPX), 2/16/23–4/21/23. S&P 500 (SPX) price chart. Another congested week.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.) Note: It is not possible to directly invest in an index.

The headline: Volatility declines as earnings season ramps up.

The fine print: Not only have the market’s weekly changes been small, they’ve occurred in a tighter-than-average range. Last week marked the SPX’s narrowest weekly (high-low) range since the four-day Thanksgiving week in November 2021 and, as of Friday, the index hadn’t closed more than 0.83% above or below its April 3 close.

The number: 5, as of last Wednesday, the number of consecutive days the Cboe Volatility Index (VIX) closed at a 52-week (or longer) low—something it’s done only five other times since 1990.1

The scorecard: It still trails the pack this year, but the Russell 2000 (RUT) small cap index led the US market for the third time in the past four weeks:

US stock index performance for week ending 4/21/23. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Sector returns: The strongest S&P 500 sectors last week were consumer staples (+1.7%), real estate (+1.5%), and utilities (+1.1%). The weakest sectors were communication services (-3.2%), energy (-2.5%), and information technology (-0.5%).

Stock movers: Prometheus Biosciences (RXDX) +70% to $193.51 on Monday, Bellus Health (BLU) +99% to $14.44 on Tuesday. Relay Therapeutics (RLAY) -36% to $11.62, and Merus (MRUS) -15% to $20.45, both on Tuesday.

Futures: June WTI crude oil (CLM3) slid nearly $5 to a three-week low of $77.78. June gold (GCM3) ended the week roughly $18 lower at $1,993.20, thanks mostly to a sharp Friday sell-off. Week’s biggest up moves: July platinum (PLN3) +8.2%, June palladium (PAM3) +7.5%. Week’s biggest down moves: April Micro ether (ETHJ3) -11.8%, April Micro bitcoin (MBTJ3) -10.2%.

Coming this week

It’s “big” week on the earnings calendar—big tech, big pharma, big oil, big airlines. Here’s a sample:

Monday: Coca Cola (KO), Crown Holdings (CCK), Cleveland-Cliffs (CLF), First Republic Bank San Francisco (FRC), Medpace (MEDP), Whirlpool (WHR)
Tuesday: General Electric (GE), General Motors (GM), Kimberly-Clark (KMB), McDonald’s (MCD), PepsiCo (PEP), Pulte Group (PHM), Raytheon (RTX), United Parcel Service (UPS), Verizon (VZ), Activision Blizzard (ATVI), Chipotle (CMG), Enphase (ENPH), Alphabet (GOOGL), Illumina (ILMN), Microsoft (MSFT), Visa (V)
Wednesday: Boeing (BA), General Dynamics (GD), eBay (EBAY), Mattel (MAT), Meta (META), O’Reilly Automotive (ORLY), Roku (ROKU), Spirit Airlines (SAVE), Teladoc (TDOC), Teradyne (TER), Waste Connections (WCN), Waste Management (WM)
Thursday: American Airlines (AAL), AbbVie (ABBV), Baxter (BAX), Bristol-Myers Squibb (BMY), Caterpillar (CAT), Honeywell (HON), Hershey (HSY), Keurig Dr. Pepper (KDP), Eli Lilly (LLY), Southwest Airlines (LUV), Mastercard (MA), Merck (MRK), Newmont (NEM), Northrop Grumman (NOC), Rockwell Automation (ROK), Amazon (AMZN), First Solar (FSLR), Intel (INTC), SkyWest (SKYW), Snap (SNAP), United States Steel (X)
Friday: Colgate-Palmolive (CL), Chevron (CVX), Exxon Mobil (XOM)

This week’s numbers include the first estimate of Q1 GDP, Fed inflation (PCE Price Index), Durable Goods Orders, and home prices:

Monday: Chicago Fed National Activity Index
Tuesday: S&P Case-Shiller Home Price Index, FHFA House Price Index, New Home Sales, Consumer Confidence
Wednesday: Durable Goods Orders, Wholesale and Retail Inventories (advance), Trade Balance in Goods (advance)
Thursday: GDP (Q1, initial estimate), Pending Home Sales
Friday: Personal Income and Spending, PCE Price Index, Chicago PMI, Consumer Sentiment

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

In search of catalysts

Last week the market followed through on its tendency to stagnate or decline after back-to-back longer-term VIX lows (see “Market edges higher”). With this week’s packed economic and earnings calendars, it stands to reason that something will have the potential to push stocks out of their doldrums, one way or the other.

If that happens, though, it would actually be somewhat out of character, given the market’s recent history. Over the past five years, the SPX’s average absolute weekly price change is +/-2%. But after weeks like last week, when 1) the index’s weekly price change is lower than the previous week’s, and 2) its high-low range is the narrowest of the past eight weeks, the SPX rose or fell only 1.3%, on average, the following week.2


Click here to log on to your account or learn more about E*TRADE's trading platforms, or follow the Company on Twitter, @ETRADE, for useful trading and investing insights.

1 Reflects Cboe Volatility Index (VIX) daily price data, January 1990–April 2023. Supporting document available upon request.
2 Reflects S&P 500 (SPX) weekly price data, April 2018–April 2023. Supporting document available upon request.

What to read next...

Thursday’s trading highlights big put positions in this stock preparing to release its numbers.

Options data signals uncertainty about upcoming market events—and high options prices.

Market turns cautious as latest round of economic data surprises to downside.

Looking to expand your financial knowledge?