Investors have been keeping a close eye on Fed chief Jerome Powell’s two-day statement this week
Another winning season hit Wall Street this week, with bank stocks topping the list. However, despite a week of key economic indicators and quarterly reports, stocks barely moved. The Dow Jones Industrial Average (DJI) started the week on a strong note, rushing towards a record close, accompanied by the S&P 500 Index (SPX) and Nasdaq composite (IXIC)as investors have looked Testimony from Federal Chairman Jerome Powell on Capitol Hill. However, the blue chip index reversed its course by Tuesday after a hotter-than-expected consumer price index (CPI) weighed on the markets – which marked the CPI fastest acceleration for almost 13 years. The S&P 500 and the Nasdaq also retreated, but not without further intraday record highs. The S&P 500 has notched itself again Mid-session high on Wednesday, although stocks were relatively subdued as investors watched bond yields decline and digested the initial comments from Powell during his two-day statement.
Thursday was another quiet day for stocks. Initial jobless claims hit a new pandemic-era low and were in line with estimates, and Powell repeated those Inflation spike will likely be temporary which drew some criticism. The markets continued to struggle for direction throughout Session on Friday Friday, amid rising inflation fears and mixed earnings reports. As of the last review, all three indices were firmly in the red, eyeing losses for the week.
Bank wins start the winning season
As usual, big names in the financial sector started another winning season. Bank earnings have been mixed this week, with many names under pressure from a sharp drop in trading activity from last year’s record highs. JPMorgan Chase (JMP) and Goldman Sachs (GS) were two sector heavyweights who felt the heat and gave way on Tuesday despite the lack of profit blows.
That didn’t stop Morgan Stanley (MS) and Charles Schwab (SCHW) refrain from recovering before their respective quarterly reports, although the former is a dampened recovery reaction. Meanwhile, Bank of America (BAC) also fell after a loss of income caused headwinds for the stock.
4 fresh stocks ready to take a dip
Based on the technical data from Schaeffer’s Senior Quantitative Analyst Rocky White, several stocks looked ripe this week. In particular, these stocks retreated on major trendlines with historically bullish implications, which means they might be worth keeping an eye on this month. A blue chip name is in the mix Salesforce.com (CRM), which has pulled back to its 40-day moving average while Ford engine (F) and Zoom video communication (ZM) retreated on the same trend line. While no technical signal is flashing, yeti (YETI) also appears poised to jump higher as it appears poised for a brief squeeze or a lessening of pessimism in the option pits.
High profile earnings on deck next week
The earnings season will be in full swing next week with plenty of high profile reports for investors including results from American Express (AXP), Biogen (BIIB), Chipotle Mexican Grill (CMG), Coca-Cola (KO), Intel (INTC), Johnson & Johnson (JNJ), Netflix (NFLX), Travelers (TRV), United Airlines (UAL) and Verizon (VZ). The economic calendar now looks relatively blank, despite the release of the National Association of Home Builders (NAHB) index and another round of job and home sales data.
In the meantime, check out our latest Outlook for Monday morning, in which Senior Market Strategist Matthew Timpane examines whether or not the short-term stock market rally is really over. Rocky White also reveals 25 stocks with solid straddle returns.