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Stock Rally Waiting on Earnings to Confirm

04/15/2019 12:00 pm EST

Focus: STOCKS

Bill Baruch

President and Founder, Blue Line Futures

After setting year-to-date highs, equity markets are waiting on a busy week of earnings and economic reports, writes Bill Baruch President of  BlueLineFutures.com, breaks down moves in major markets.

The S&P 500, Nasdaq 100 and Dow Jones Index all settled Friday at new highs for the year (see chart below).

Members of the Federal Reserve and minutes from the March FOMC meeting confirmed a patient and accommodative policy path while the March Consumer Price Index (CPI)—at least when excluding food and energy — showed inflation was not a concern.

Traders and investors alike look to the onset of earnings season this week amidst lowered expectations to be the next catalyst helping fuel prices to new all-time highs. JPMorgan (JPM) beat earnings on Friday and finished up 4.69% on the session leading broad gains in the banking sector. Citigroup (C) and Goldman Sachs (GS) look to keep the party going with earnings releases Monday morning. The slate picks up speed on Tuesday with Bank of America (BAC), United Health Group (UNH), Johnson & Johnson (JNJ), BlackRock (BLK) and others before the bell. Netflix (NFLX) headlines after the bell on Tuesday and will be joined by IBM (IBM).

S&P 500 Emini

Better than expected or less-worse Eurozone Industrial Production and a bounce back in Chinese exports led the headlines on Friday. The market ignored weak U.S imports to China and a miss on Michigan Consumer Sentiment. Overall, economic data from around the world has been soft at best with scattered bright spots or what we have coined less-worse reads.

Has the downtrend in growth begun to bottom?

This week could certainly provide some answers. On Monday, we look to NY Empire State Manufacturing, which has fallen short of expectations for three out of the last four months. Tuesday might be the most pivotal day with U.K jobs, German ZEW Sentiment and U.S Industrial Production early and then Chinese GDP along with the trio of Industrial Production, Fixed Asset Investment and Retail Sales late.

If not Tuesday, then the most pivotal is without a doubt Thursday. Here, we look to Eurozone and U.S Flash PMIs, U.S Retail Sales and Philly Fed Manufacturing. The risk-appetite finished the week on a very positive note with stocks, commodities, Treasury yields and risk-currencies all gaining ground.

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