Benchmarks Gain Momentum to Close Volatile Week

Inflation concerns still affected the market at the start of the week

Deputy Editor
May 21, 2021 at 2:06 PM
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This past week was a rocky one for Wall Street. On Monday, inflation fears persisted from the previous week's Consumer Price Index (CPI) reading, which weighed heavily on Big Tech, and investors continued to abandon growth stocks in favor of reopening plays. Tuesday, stocks pared their earlier gains to close lower amid worse-than-expected housing starts data, and the Dow finished down 270 points. Mid-week, bitcoin's dramatic selloff spooked traders, and provided no help to Big Tech's slump. Plus, investors eyed comments from Federal Reserve Chairman Jerome Powell as the possibility of adjusted fiscal policy came into view.

Thursday, the benchmarks snapped their collective three-day losing streak, thanks to a surge in tech stocks and upbeat jobs data, which showed first-time claims for unemployment benefits totaled a new pandemic-era low of 444,000 versus the 452,000 estimates. Friday, all three indexes are on track for daily wins, while the Nasdaq is the only benchmark eyeing a weekly gain. 

Retail Earnings in Focus

The retail sector stayed in the spotlight throughout the week, as plenty of quarterly reports came in. Both analysts and options traders chimed in on TJX Companies (TJX) stock ahead of the company's first-quarter earnings. Target stock (TGT) also saw a surge in options before earnings as it dipped slightly, popping to a record high the next day after posting a 23% pop in quarterly sales, as well as earnings and revenue that blew past analysts' estimates. Home improvement retailer Lowe's (LOW) announced an upbeat quarterly report as well, though the stock still continued its losing streak. Meanwhile, L Brands (LB) stock extended its previous session's bear gap despite an upbeat report amid spinoff buzz.

Vaccine Names Making Moves

Covid-19 vaccinations have stayed on investors' minds as economic reopening continues. This week, two stocks were highlighted in the midst of these conversations. First, AstraZeneca (AZN) was highlighted after the Financial Times reported that the company's Covid-19 vaccine works well as a third booster shot, according to a study by Oxford University, the vaccine's co-developer. Later on in the week, Moderna's (MRNA) vaccine was officially approved by Japanese and South Korean regulators, and there was word that the company was considering manufacturing its vaccines in Japan.

Looking Toward the Last Week in May

Next week, there will once again be plenty of retail earnings, but economic data will ramp up as well. Some of the big-name reports due out are AutoZone (AZO), Costco (COST), Dell (DELL), Dollar General (DG), Dollar Tree (DLTR), and NVIDIA (NVDA). In the meantime, check out this speculation from Schaeffer's Senior Quantitative Analyst Rocky White, exploring whether or not a spike in Cboe Volatility Index (VIX) can lead to a bullish stock move in the future. 


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