Eye on earnings
- Small caps keep things green, oil boosts energy sector
- Biden unveils $1.9 billion stimulus package
- This week: Housing numbers, earnings season builds
Coming off their robust start to the year, US stocks took a breather last week, as a Thursday–Friday downturn amid some weaker-than-expected economic data locked in a loss for the S&P 500 (SPX):
Source: Power E*TRADE
The headline: Broad market pulls back, Biden unveils new stimulus measures.
The fine print: The political story of the week may have been the second impeachment of President Trump, but markets were likely more focused on new economic stimulus measures. President-Elect Joe Biden obliged by announcing a $1.9 trillion package on Thursday—which, if approved, would bring the total tab since the beginning of the pandemic to $5.2 trillion.1
The number: 965,000, the weekly jobless claims number—much higher than the 790,000 estimate. Retail sales also missed badly on Friday, -0.7% vs. -0.1%.
The scorecard: The Russell 2000 (RUT) was the only index to gain ground last week, even though it took the biggest hit on Friday:
Source (data): Power E*TRADE
Sector roundup: The strongest S&P 500 sectors last week were energy (+2.9%), real estate (+1.8%), and utilities (+1.1%). The weakest sectors were communication services (-3.4%), information technology (-2.5%), and consumer staples (-1.9%).
Highlight reel: On the upside, VOXX International (VOXX) +58% to $23.28 on Tuesday, GameStop (GME) +57% to $31.40 on Wednesday. On the downside, Editas Medicine (EDIT) -15% to $76.94 on Monday, Cardiff Oncology (CRDF) -31% to $13.46 on Friday.
Futures action: March WTI crude oil (CLH1) popped to $53.94/barrel on Wednesday—its highest level in almost a year—but slid Friday to end the week at $52.42. February gold (GCG1) slipped to a five-week low of $1,817.10/ounce last Monday, then tread water to close Friday at $1,829.90. March US dollar index futures (DXH1) started the week strong and ended it that way too, closing Friday at a one-month high of 90.75.
Last week's biggest futures up moves: March hard red wheat (KWH1) +8.1%, February ethanol (ZKG1) +7.2%, March corn (ZCH1) +7.1%. Last week's biggest futures down moves: January bitcoin (BTCF1) -5%, January bitcoin (BTCF1) -9.5%, March soybean oil (ZLH1) -4%.
Coming this week
The earnings calendar is busy despite the holiday-shortened week:
●Tuesday: Bank of America (BAC), JB Hunt Transport Services (JBHT), Halliburton (HAL), Goldman Sachs (GS), Netflix (NFLX)
●Wednesday: Alcoa (AA), United Airlines (UAL), U.S. Bancorp (USB), Procter & Gamble (PG), FuelCell Energy (FCEL), UnitedHealth Group (UNH), Teradyne Inc (TER)
●Thursday: American Airlines (AAL), Intel (INTC), Union Pacific (UNP), CSX (CSX), Citrix Systems (CTXS)
●Friday: Ally Financial (ALLY), Kansas City Southern (KSU), New Oriental Education & Technology (EDU), Schlumberger (SLB)
IPOs this week include:
●Thursday: MYT Netherlands Parent (MYTE), Dream Finders Homes (DFH)
●Friday: Patria Investments (PAX)
Housing data dominates the week’s economic calendar:
●Wednesday: NAHB Housing Market Index, Presidential inauguration
●Thursday: Housing Starts and Building Permits
●Friday: Markit Manufacturing PMI (flash), Markit Services PMI (flash), Existing Home Sales
Go to the E*TRADE market calendar for an up-to-date earnings schedule and complete list of splits, dividends, IPOs, and economic reports. The Active Trader Commentary also lists earnings announcements, IPOs, and economic report times each morning.
Under the sector radar
Delving a little deeper into last week’s sector action reveals some interesting developments at the industry level:
●Tech may have been one of the weakest sectors, but the semiconductor space bucked that trend, gaining 1.3% for the week.
●Airlines and aerospace and defense were two of the bright spots in an otherwise lackluster industrial sector.
●Consumer discretionary also had a blah week, but consumer durables gained more than 3%, with some surprising rallies in auto stocks—check out charts of General Motors (GM) and Ford (F)—helping fuel the move.
Finally, there were two sides to the “energy” coin last week: Crude oil’s strength helped keep fossil-fuel stocks at the head of the sector pack for the second-straight week, but a steep Friday sell-off in solar put a dint in the alt-energy space.
1 Reuters. Analysis: Biden's $1.9 trillion rescue package offers bridge for hard-hit economy. 1/14/21.