MAKETS NEXT WEEK ..
posted on
Apr 11, 2021 10:13PM
We may not make much money, but we sure have a lot of fun!
Markets eneded the week up, with the S&P 500 returning 2.8%. The returns were broad across sectors with 10 out of the 11 S&P sectors ending the week higher. The sole sector left out was the energy sector. The benchmark ETF for the sector, XLE, had a total return of -4.6% for the week. Energy stocks fell in tandem with oil prices due to pessimism about demand due to the increasing spread of the COVID-19 as more infectious strains increased transmission of the virus. In addition, the U.S. Energy Information Administration (EIA) reported an increase in gasoline stockpiles indicating lower than expected demand over Easter weekend.
The best performing sector was the tech sector. That sector's benchmark ETF, XLK, produced a mirror image of the returns of XLE, returning 4.6% for the week, pulled higher by strong performance from Apple (AAPL) and Microsoft (MSFT) this week. Amazon (AMZN), over in the consumer discretionary sector also rose significantly this week after workers at its Bessemer, Alabama warehouse fulfillment center voted not to form a union.
This week we're looking at big bank earnings, Coinbase's direct listing, and March U.S. retail sales. But first, let's see how different asset classes have been doing.
Monday, April 12:
Tuesday, April 13:
Wednesday, April 14:
Thursday, April 15:
Friday, April 16:
First quarter report cards will start coming in next week, and the outlook couldn't be more different from a year ago. Most companies that survived the past 12 months are better off in terms of their balance sheets and their prospects.
Overall, S&P 500 earnings are expected to have jumped 25% in the first quarter from a year ago, according to Institutional Brokers' Estimate System (IBES) data cited by Reuters. That would be the biggest quarterly increase since 2018 when the Trump administration enacted the 2017 Tax Cuts and Jobs Act.
Big banks will be among the first to report results next week, including JPMorgan Chase, Goldman Sachs, and Wells Fargo. The net interest margins have been rising along with interest rates, driving the financial giants' bottom lines. Bank stocks have been among the best performers in 2021 as more spending and rising rates are a great recipe for growing profits.
Coinbase, the largest cryptocurrency exchange in North America, plans to go public on April 14 via a direct listing. Investors have been waiting for this one, as it is the first crypto exchange to sell shares to the public.
The company is selling 114.9 million shares directly to the public, according to its S-1 filing with the SEC. It plans to reveal a reference price for shares a day before trading begins, but analysts have valued the company anywhere from $70 billion to $100 billion. The company said it has 56 million verified accounts in its filing, and it reported revenue of $1.8 billion in the last quarter, with net income of approximately $730 million to $800 million.
We'll also get reports on retail sales for the U.S. and Europe next week. In the U.S., we'll be paying attention to whether sales picked up from January and February, especially after the most recent round of stimulus checks was issued. Are consumers spending, saving, or investing that extra cash?
We'll also get a preliminary report on U.S. consumer confidence and expectations for April. Spending expectations are sky-high, given the success of the vaccine rollout and the reopening of the economy. Are consumers feeling that too?