Hovering near highs

  • More record highs, Russell 2K continues to pace market
  • Biggest oil rally in two years pumps up energy sector
  • This week: FOMC minutes, retail sales, housing data

A Monday rally, four days of coasting, another rally on Friday—and a modest weekly gain.

That pretty much sums up last week’s stock action, as traders appeared to hit the pause button coming off the market’s best week since November.

Even though the S&P 500 (SPX) made its biggest pushes on Monday and Friday, it also hit marginal new intraday or closing highs on Tuesday, Wednesday, and Thursday:

Chart 1: S&P 500 (SPX), 12/4/20–2/12/21. S&P 500 (SPX) price chart. More records, quiet trading.

Source: Power E*TRADE

The headline: Small caps, energy, and semiconductors drive gains in quiet trading.

The fine print: The Biden administration made moves to shelve the proposed deal to give Oracle and Walmart US oversight over Chinese video platform TikTok, while at the same time reviewing the app’s supposed security threat1—a signal that the White House is taking steps to reframe relations with China?

The number: 14.9%, the Q4 increase in median US home prices—the biggest jump since 1990.2 Many homebuilding stocks jumped last Thursday on the news, and the S&P construction materials index gained 9.3% last week.

The quote: “If we don’t get moving, they are going to eat our lunch.” President Joe Biden, speaking to the Senate Environment and Public Works committee, on the need to keep pace with China on infrastructure spending.3

The scorecard: Small caps maintained their leadership last week:

US stock index performance table for week ending 2/12/20. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE

Sector roundup: The strongest S&P 500 sectors last week were energy (+4.3%), information technology (+2.3%), and financials (+2%). The weakest sectors were utilities (-1.8%), consumer discretionary (-1.3%), and consumer staples (-0.1%).

Highlight reel: On Monday Voxeljet (VJET) +61% to $36, KalVista Pharmaceuticals (KALV) +115% to $33.5 on Tuesday. To the downside, Capital Senior Living (CSU) -20% to $29.25 on Tuesday, Tilray (TLRY) -50% to $32.16 on Thursday.

Futures action: March WTI crude oil (CLH1) shot to a new contract high of $59.73/barrel on Friday, capping one of its strongest two-week runs in years. April gold (GCJ1) bounced the first three days of last week, but pulled back to end the week slightly lower at $1,824.80/ounce.

Last week's biggest futures up moves: February bitcoin (BTCG1) +26.7%, April platinum (PLJ1) +11.5%, March lumber (LBSH1) +7%. Last week's biggest futures down moves: March cocoa (CCH1) -3.3%, March VIX (VXH1) -3%, March coffee (KCH1) -2.7%.

Coming this week

Plenty of earnings announcements are packed into the four-day week:

Tuesday: AutoNation (AN), Advance Auto Parts (AAP), Boyd Gaming (BYD), Exact Sciences (EXAS), Royal Caribbean Cruises (RCL), CVS Health (CVS), Occidental Petroleum (OXY), Lattice Semiconductor (LSCC), Vulcan Materials (VMC), Scientific Games (SGMS), RingCentral (RNG), SolarEdge (SEDG)
Wednesday: Analog Devices (ADI), Baidu (BIDU), Marathon Oil (MRO), Charles River Laboratories (CRL), Hyatt Hotels (H), SunPower (SPWR), Progressive (PGR), Mosaic (MOS), Fastly (FSLY), Q2 (QTWO), Wingstop (WING), Stamps.com (STMP), Shopify (SHOP)
Thursday: Applied Materials (AMAT), Arista Networks (ANET), BigCommerce (BIGC), Norwegian Cruise Line (NCLH), Newmont (NEM), Dropbox (DBX), EPAM Systems (EPAM), eHealth (EHTH), First Solar (FSLR), Walmart (WMT), Keysight (KEYS), Waste Management (WM), Roku (ROKU), Marriott (MAR)
Friday: Deere (DE)

This week’s economic calendar includes FOMC minutes, retail sales, and the month’s first housing numbers:

Tuesday: Empire State Manufacturing Index
Wednesday: Retail Sales, Producer Price Index (PPI), Industrial Production and Capacity Utilization, Business Inventories, NAHB Housing Market Index, FOMC minutes
Thursday: Housing Starts and Building Permits, Import and Export Prices
Friday: February options expiration, Markit Composite 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.

Presidents Day Dip?

Fans of short-term market seasonal patterns may want to take note of the stock market’s tendency to get a little lazy after the long Presidents Day weekend: The Wednesday and Thursday after the holiday have been weaker-than-average over the past 50 years, with the SPX closing lower on both days 60% of the time. The index’s long-term odds of a down day are only 47%.4


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1 AP News. Biden backs off on TikTok ban in review of Trump China moves. 2/11/21
2 Bloomberg.com. U.S. Home Prices Post Record Gain, Topping Peak From 2005. 2/11/21.
3 BBC.com. Biden warns China will 'eat our lunch' on infrastructure spending. 2/11/21.
4 Based on S&P 500 (SPX) daily closing prices, 1971–2020. Supporting document available upon request.

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