For the second consecutive week, major US indices traded in a pretty tight range, closing on either side of unchanged. Strength in the mega-cap tech stocks helped the S&P 500 notch a new all-time high with options expiration keeping the index pinned to the 6,300 strike to end the week. Just looking at the index level trading you wouldn’t necessarily know it but it has been another very busy week full of key economic data, the “official” start of earnings season and Crypto Week in Washington. There was also some brief drama as President Trump had a flash back to his Apprentice Days which has been followed by a round of auditions to replace Fed Chair Powell. The big story coming out of the weekend was the sharp rally in crypto currencies which started late last week amidst the steady stream of crytpo-treasury announcements and ahead of this week’s Crypto Week in DC. After some procedural holdups the House passed legislation to establish a regulatory framework for digital assets including the Genius and Clarity Acts. Bitcoin started to break out to new all-time highs at the end of last week and shot up to around 123k earlier this week before pulling back. Back to the relatively “boring” equity market. The first week of earnings is always dominated by the financials and broadly the numbers were strong. The stocks have had a muted response but it’s also important to remember that some of the major banks were up >20% YTD coming into the quarter. The scope of earnings will begin to broaden out in the coming weeks but thus far early indications from the handful of other companies that have reported suggest the numbers will be good. For next week, the big economic events are the ECB's interest rates decision (consensus at no change) and Flash PMIs. Powell and Bowman will be speaking at a conference, and President Trump is scheduled to speak Wednesday at the Winning the AI Race summit.

Expand article