S&P 500 pushes highs as volatility evaporates
05/08/17

Stocks ended last week strong following a deluge of important news.

The S&P 500 rose 0.6 percent between Friday, April 28, and Friday, May 5. The index established a new record closing high of 2399, barely a point below its previous all-time peak on March 1. CBOE’s fear-tracking volatility index also fell to its lowest levels in more than a decade.

The calm market occurred against an agenda busy with potential catalysts. Tech giants like Apple (NASDAQ: AAPL) and Facebook (NASDAQ: FB) had small moves after releasing quarterly numbers. Job figures from the government showed more steady gains yet few surprises. Congress and the White House made progress on the budget and health care, but the market shrugged. Even the Federal Reserve’s meeting was met with a yawn.

Financials and technology rose about 1 percent last week, making them best-performing sectors. There was also a continued migration of capital into global stocks (up another 1.6 percent) as polls showed investor-favorite Emmanuel Macron poised to win France’s presidential election over the weekend. 

Commodities caused a little bit of drama as worries about supply gluts in oil and metals hammered prices.1 That pushed energy down almost 1 percent, placing it at the bottom of the week’s sector rankings.

At the company level, Regeneron Pharmaceuticals (NASDAQ: REGN) was the S&P 500’s top-performer last week with a 10 percent gain. Delphi Automotive (NYSE: DLPH) rose more than 9 percent after beating estimates and announcing a corporate spinoff.

 

S&P 500 6-month chart

Source: OptionsHouse by E*TRADE

A pair of technology stocks led to the downside on the heels of poor numbers: Chipmaker Advanced Micro Devices (NASDAQ: AMD) plunged 23 percent and web-hosting firm Akamai Technologies (NASDAQ: AKAM) slid 14 percent.2

The forward calendar is quieter than last week, but there is consumer-related news. It starts tomorrow night with earnings from Walt Disney (NYSE:DIS), Priceline (NASDAQ: PCLN), News Corp. (NASDAQ: NWSA), Discovery Communications (NASDAQ: DISCA), and Nvidia (NASDAQ: NVDA). 

Wednesday has oil inventories, plus earnings from Whole Foods (NASDAQ: WFM) and Twenty-First Century Fox (NASDAQ: FOXA). Thursday features jobless claims and results from Kohl’s (NYSE: KSS) and Nordstrom (NYSE: JWN). It wraps up Friday morning with retail sales data and consumer sentiment.

In summary, there are few signs of fear in the market as the S&P 500 continues to churns near record highs.

 

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1. The Australian: Iron Ore swoons 6c as supply glut fears smash sentiment. 5/5/17. CNBC: Oil went through a flash crash overnight, putting an already fragile market on edge. 5/5/17.

2. Marketwatch: AMD plunges more than 7% after announcing largely in-line quarterly earnings. 5/1/17. Reuters: Akamai's weak current-quarter forecast sends shares down. 5/2/17.