Record-Setting Week for Stocks; Earnings Season Begins With Gusto

The VIX went on an unprecedented run of single-digit closes

Managing Editor
Jul 21, 2017 at 1:31 PM
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It was a week to remember for broad-market indexes, which climbed despite swirling political uncertainty. The Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) broke out to new record highs, as did the Nasdaq Composite (COMP), which was the talk of the town all week, extending its longest winning streak in two years. Plus, the CBOE Volatility Index (VIX) set a new record of its own, thanks to an unprecedented stretch in single-digit territory. Markets also digested the start of earnings season, which saw the likes of Netflix and a handful of blue chips report earnings.

Apple Enjoys Longest Winning Streak in Years

Outside of the Nasdaq and VIX, among the record-breakers to make headlines this week was Apple stock, which posted a nine-day winning streak -- its longest since August 2014.  On the flip side, it was a rough week for transport stocks, which suffered their worst week in over a year.

Netflix, Dow Stocks Report Earnings

The COMP's historic streak was attributable to a strong showing from tech stocks, such as Netflix, which reported outstanding earnings. While many big-cap banks reported lackluster earnings -- including Dow stock Goldman Sachs --  Morgan Stanley bucked the trend and delivered an earnings beat. What's more, a couple other bank stocks sent up potential "buy" signals, and Visa earnings were well-received.

However, several other blue chips struggled after reporting subpar earnings. Big Blue earnings left much to be desired, Microsoft stock lost some of its mojo, and General Electric stock sank after earnings, weighing on the Dow on Friday.

Amazon Continues Its Efforts To Rule The World

Despite Amazon's recent FTC drama it seems anything the FAANG giant touches turns to gold. Conversely, the presence of Amazon in your industry usually spells doom -- at least in the short term. Blue Apron was sent spiraling after Amazon began its foray into the meal-kit industry, and Home Depot tumbled after Amazon linked up with rival Sears Holdings to feature its Kenmore products. Meanwhile, recently announced retail Amazon partner Nike enjoyed a relatively positive week.

Chipotle's PR Nightmare

Chipotle made headlines this week for all the wrong reasons. Another case of norovirus outbreak in Virginia initially sent the stock tumbling into the red for 2017. Adding salt to CMG stock's wounds, reports of rodents falling from the ceiling at a Dallas location sank the shares even more. As a result, several analysts downwardly revised their targets for Chipotle stock.

FAANG Earnings, Fed Highlight Next Week

Next week will mark a continuation of earnings season, with Exxon, Verizon, and McDonald's set to report. Three more FAANG stocks will report as well, with Amazon, Google, and Facebook next up to bat. Markets will also be eyeing the Federal Open Market Committee (FOMC) meeting, which wraps up on Wednesday. However, as Schaeffer's Senior VP of Research Todd Salamone recently noted, "There is little chance that the Fed raises rates at this meeting, and a 'status quo' policy stance could provide a launching point for stocks, if the recent pattern continues."


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