The market stumbled out of the blocks this week, with the major indexes all logging modest declines on a Monday that was low on trading volume and slow on broader macro news.
Consider it the calm before the (potentially fruitful) storm.
The first-quarter earnings season kicks off in earnest later this week, and it could be a big one.
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"The outstanding fourth-quarter earnings season we had in 2020 is a tough act to follow, but 2021's first quarter has the makings of another potentially great earnings season," say LPL Financial strategists Jeffrey Buchbinder and Ryan Detrick. "The reopening of the economy continues to move forward, and corporate America has done an excellent job managing through the pandemic. In fact, it won't take much of an upside surprise for year-over-year S&P 500 Index earnings growth to reach 30% this quarter."
For today, however, declines in the energy (-0.8%) and technology (-0.5%) sectors weighed on the wider market, including a 0.2% loss for the Dow, which closed at 33,745.
Other action in the stock market today:
- The S&P 500 finished marginally lower to 4,127.
- The Nasdaq Composite declined 0.4% to 13,850.
- The small-cap Russell 2000 also fell 0.4% to finish at 2,233.
- U.S. crude oil futures started the week higher, adding 38 cents, or 0.6%, to settle at $59.70 per barrel.
- Gold futures fell $12.10, or 0.7%, to close at $1,732.70 an ounce.
- The CBOE Volatility Index (VIX) jumped 2.2% to 17.05.
Where the Market's Making Sparks
But even on a yawner like Monday, there's plenty for investors to pay attention to.
For instance, Microsoft (MSFT, up marginally) advanced further into the health technology space by announcing a $16 billion all-cash deal for speech-recognition software company Nuance Communications (NUAN, +16.0%).
And an already firework-filled 2021 for semiconductor stocks became even more electric as Nvidia (NVDA, +5.6%) announced its first server CPUs – another shot across the bow of competitor Intel (INTC, -4.2%). The firm also says Q1 revenues are tracking above the $5.3 billion outlook it previously provided.
Also, a number of digital currencies headed higher ahead of Wednesday's public-market debut of Coinbase, which allows investors to buy and sell cryptocurrencies. That includes bitcoin, which at $60,068 is hovering near its all-time high of $61,712 set in March.
The offering is expected to further bolster individual and institutional interest – a key potential driver of bitcoin prices that we highlighted in our annual outlook.
If you want to learn more ahead of what should be a busy week not just for stocks, but for digital currencies, check out our primer that answers common questions about bitcoin. Or, have a listen to our recent conversation with Onramp Invest CEO Tyrone Ross, who provides his expert insight into what bitcoin can be for investors and consumers alike.
Kyle Woodley was long NVDA as of this writing.
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