Short Market Week With Lots Of Potential Catalyst

Key Takeaways

• Stocks Get Back On Track
• Short Trading Week
• EU Investigating Apple, Alphabet and Meta

Stocks got back to their winning ways last week. The Nasdaq Composite added 0.16% on Friday and closed 2.8% higher for the week. Meantime, the S&P 500 closed higher by 0.14% on Friday, putting its weekly gains at 2.3%.

This week is going to be an unusual week for traders. The trading week ends on Thursday and we’ll have a fair amount of news to digest throughout the week. But then on Friday, with both the futures and equities markets closed, the Personal Consumption Expenditures (PCE) Index will be released. I can’t recall a time when we had a scenario like this where important data is released and all markets (futures and equities) are closed, so that could make for interesting trading as we get closer to Thursday’s close. Prior to then, we have plenty to keep us engaged.

On the earnings front, GameStop
GME
announces Tuesday after the close. While much of the fanfare around this meme darling has dissipated, we did just see the Initial Public Offering (IPO) from Reddit last week. Therefore, I wouldn’t be surprised if we see some activity around one or both of these stocks. After the close on Wednesday, Carnival Cruise Lines will announce their earnings. Then on Thursday, before the open, Walgreens Boots Alliance
WBA
is scheduled to report.

Turning to the economic calendar, as I mentioned, we have the PCE Index on Friday. Prior to then, the latest on New Home Sales is due out later this morning. Then tomorrow, the most recent Durable Goods report will be released. That report is expected to show a 1.2% month-over-month increase with Core
CORE
Durable Goods expected to be higher by 0.4% month-over-month.

Perhaps the week’s most interesting data will be more qualitative than quantitative as several members of the Federal Reserve are scheduled to speak throughout the week. Following last week’s Fed meeting, Chairman Powell affirmed his intention to cut interest rates later this year and seemed, what one might characterize as dismissive, about recent economic data coming in slightly stronger than expected. Powell largely attributed the strong data to non-recurring factors that the Fed doesn’t feel will continually add to inflationary pressure. His statement left more than a few observers scratching their heads, so I’m interested in hearing what members of the Fed say this week.

A story in the Financial Times this morning says the European Commission is launching investigations into Apple
AAPL
, Google and Meta. The investigation is the result of the Digital Markets Act, which the EU passed earlier in the month to address the dominance of just a handful of digital gatekeepers. The investigation into Apple and Google
GOOG
centers around whether or not the two companies favor their own app stores in an unfair way to competitors. The Meta investigation surrounds how the company uses personal data for advertising. These investigations could have potentially large implications for the companies’ respective global revenues. This is a breaking story and one I’ll be closely monitoring.

Another story I’m watching this morning involves China and U.S. companies Microsoft
MSFT
, Intel
INTC
and AMD. China is looking to replace the use of Intel and AMD chips in government PCs and servers, as well as discontinue the use of Microsoft Windows. The moves come as part of the tit-for-tat escalating trade war between the U.S. and China and these are arguably the most significant steps China has taken thus far.

Finally, heading into this week, bitcoin is rebounding some from its lows last week. After trading as low as nearly $61,000, bitcoin is now just under $67,000. Also, both gold and oil are up slightly this morning with gold higher by just over 0.5%, followed by oil which is up .3%. I’ll remind readers we often see trading volumes lighten as we head into a long weekend. This is also a week where a lot of people are already off because of Spring break. Therefore, I will not be too surprised if volume begins drying up Wednesday into Thursday. However, I would also caution investors to remember it’s when volume begins getting light that a rather innocuous story can cause market volatility. As always, I would stick with your investing plan and long-term objectives.

tastytrade, Inc. commentary for educational purposes only. This content is not, nor is intended to be, trading or investment advice or a recommendation that any investment product or strategy is suitable for any person.