Nasdaq 100 first to cross finish line

04/22/19
  • Nasdaq 100 (NDX) hit new all-time highs
  • Traders embraced financials, put hurt on health care stocks
  • This week: GDP, housing, and lots more earnings

It may have been in rarified air for less than 10 minutes, but a record is a record: The tech-centric Nasdaq 100 (NDX) hit a new all-time high of 7,715.07 last Wednesday morning, making it the first major US index to accomplish that feat since October. And despite retreating throughout the session, it also notched a new record close, and followed up with another one on Thursday:

Nasdaq 100 (NDX) and S&P 500 (SPX), 3/8/19–4/18/19. Nasdaq 100 (NDX) and S&P 500 (SPX) price chart. New high by a nose.

Source: Power E*TRADE


Aside from that tidbit, last week was a bit of a snoozer for the majority of the stock market, which peaked early Wednesday and then sagged going into the three-day weekend. More solid earnings—and rising stock prices—in the financial sector highlighted the bullish side of the ledger, while a sell-off in health care names was the most notable concentration of bearish sentiment.

The shortened week also included Netflix’s (NFLX) quarterly numbers, which, as of Thursday, were something of a non-event. The company topped its earnings and revenue estimates—and posted a record gain in subscribers—but downsized its Q2 earnings outlook.1 The stock jerked up and down the next couple of days before ending the week a little above where it was right before it released its numbers (around $360), and more or less in the middle of its two-month trading range.

Despite the mild Wednesday–Thursday’s weakness, the NDX and the Dow Jones Industrial Average (DJIA) notched weekly gains, while the S&P 500 (SPX) and Russell 2000 (RUT) ended in the red:

US stock index performance table for week ending 4/18/19. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source: Power E*TRADE


Sector breakdown: The top-performing S&P 500 sectors last week were financials (+2.6%), industrials (+2.6%), and information technology (+2.1%). The worst-performing sectors were unchanged from last week: health care (-5.3%), real estate (-2.7%), and utilities (-1.1%).

Power Moves: The move of the week wasn’t the biggest, but it may have had the biggest ripple effect. Qualcomm (QCOM) surged +23% on Tuesday and 12% on Wednesday after settling a long-running legal battle with Apple (AAPL),2 helping propel the SPX semiconductor and equipment group to a 5.1% gain for the week.

Other notables: Vectrus (VEC) leaped 31% and Electronics For Imaging (EFII) jumped 29% on Monday. On the downside, Wave Life Sciences (WVE) tumbled 28% on Tuesday, and eHealth (EHTH) dropped 17% on Wednesday—two painful moves in a bad week for health care across the board.

And the week’s highest-profile IPOs— Zoom (ZM) and Pinterest (PINS)—both got off to sizzling starts on Friday, closing 72% and 28%, respectively, above their initial pricing levels.

Futures action: June WTI crude oil (CLM9) knocked on the door of $65/barrel a couple more times last week before turning lower Wednesday and closing Thursday around $64. June gold (GCM9) broke below support around $1,285/ounce—ultimately falling to $1,273, its lowest level since December 21—before closing the week around $1,277. And after pulling back and tagging support at the top of its February trading range, the June 10-year T-note (ZNM9) bounced Thursday to close around 123.

Coming this week

It’s earnings season in earnest, with high-profile tech, consumer, airline, aerospace and defense, pharma, energy, and housing names all vying for the spotlight. Check back daily for the latest schedule—the following list is only a taste of what’s on the week’s menu:

Monday: Halliburton (HAL), Kimberly-Clark (KMB), Cadence Design (CDNS), Zions Bancorp (ZION)

●Tuesday: Coca-Cola (KO), Fifth Third (FITB), Harley-Davidson (HOG), JetBlue Airways (JBLU), Lockheed Martin (LMT), Procter & Gamble (PG), PulteGroup (PHM), Quest Diagnostics (DGX), Sherwin-Williams (SHW), Twitter (TWTR), Verizon (VZ), eBay (EBAY), Edwards Lifesciences (EW), Meritage Homes (MTH) Snap (SNAP), Teradyne (TER), Texas Instruments (TXN)

●Wednesday: AT&T (T), Biogen (BIIB), Boeing (BA), Boston Scientific (BSX), Caterpillar (CAT), Northrop Grumman (NOC), T-Mobile US (TMUS), Thermo Fisher (TMO), Advanced Micro (AMD), F5 Networks (FFIV), Facebook (FB), Lam Research (LRCX), Microsoft (MSFT), PayPal (PYPL)

●Thursday: AbbVie (ABBV), Altria (MO), American Airlines (AAL), Baxter (BAX), Bristol-Myers (BMY), D.R. Horton (DHI), Dunkin (DNKN), Hershey Foods (HSY), Raytheon (RTN), Rockwell Automation (ROK), Southwest Air (LUV), Waste Management (WM), Amazon (AMZN), Baidu.com (BIDU), Ford Motor (F), GrubHub (GRUB), Intel (INTC), iQIYI (IQ), Juniper Networks (JNPR), Mattel (MAT), Starbucks (SBUX)

Friday: Archer-Daniels (ADM), Chevron (CVX), Colgate-Palmolive (CL), Exxon Mobil (XOM), Sony (SNE)

In addition to GDP on Friday, this week’s economic calendar includes more housing data, which dovetail with the earnings releases of a few big home-builder stocks:                                                                                       

Monday: Existing Home Sales

Tuesday: FHFA House Price Index, New Home Sales

Wednesday: Bank of Japan Announcement, Bank of Canada Announcement

Thursday: Durable Goods Orders

Friday: GDP, Consumer Sentiment

Go to the E*TRADE market calendar (logon required) for an up-to-date earnings schedule and a complete list of splits, dividends, IPOs, and economic reports. The Active Trader Commentary also lists earnings announcements, IPOs and economic report times each morning.

Word on the Street

I can see the [fed] funds rate being flat and unchanged into the fall of 2020.

Chicago Federal Reserve President Charles Evans .3

Market Easter eggs: The sequel. The week after Easter has been mostly bullish for the US stock market in recent history. Since 1997, the SPX has had positive average returns each of the first four days after Easter (with Thursday being the most bullish), but a negative average return on Friday.4

Last week was the NDX’s sixth-straight up week—three shy of the nine-week streak it started the year with.

Finally, two stocks that recently took hits because of the “Amazon effect”—Spotify (SPOT) and eBay (EBAY)—reversed sharply to the upside after making multi-day lows on Thursday morning.

 

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1 MarketWatch.com. Netflix attracts a record number of new subscribers, but the stock isn’t reacting like usual. 4/17/19.

2 Reuters. Qualcomm stock surges after settling long patent dispute with Apple. 4/16/19.

3 CNBC.com. Fed’s Charles Evans tells CNBC rates can stay unchanged into fall of 2020. 4/15/19.

4 Supporting document available upon request.

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