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Stocks Surge: Nasdaq and S&P 500 Extend Weekly Gains Amid Earnings Buzz

By:JJ Kinahan

Meanwhile, global markets arre bracing as the EU probes tech giants, and the U.S.-China trade escalates

  • Scrutiny of tech companies is intensifying as the EU probes Apple, Google and Meta. Meanwhile, trade tensions are escalating between China and the United States.

  • The markets appear resilient in the face of bad news: Stocks are surging despite looming volatility, and investors are closely monitoring economic data.

  • Strategic caution is advised: Bitcoin is rebounding, but trading volumes may thin. Stick to long-term objectives.

Last week marked a return to favorable conditions for stocks, with the Nasdaq Composite closing 0.16% higher on Friday and boasting a 2.8% increase for the week. Similarly, the S&P 500 wrapped up the week with a 0.14% gain on Friday, accumulating a 2.3% increase overall.

Looking ahead, traders are bracing for an unconventional week that concludes on Thursday. But Friday holds significance with the release of the personal consumption expenditures (PCE) index, despite both futures and equities markets being closed. This unusual scenario adds an intriguing layer to trading dynamics leading up to Thursday's close, as important data emerges.

A batch of market intel

In the realm of earnings, the GameStop' (GME) announcement post-market on Tuesday has garnered attention despite the fading buzz around the meme stock, especially given the recent Reddit (RDDT) IPO. Additionally, Carnival Cruise Lines (CCL) follows suit with its earnings report after Wednesday's close, while Thursday morning brings the awaited report from Walgreens Boots Alliance (WBA).

Economic insights punctuate the week, with the PCE Index slated for Friday release. Preceding that, updates on new home sales hit the scene, alongside the durable goods report the following day, expected to show a 1.2% month-over-month increase, with core durable goods projected to rise by 0.4%.

The qualitative narrative gains momentum with scheduled addresses from Federal Reserve members, building upon Chairman Jerome Powell's reaffirmation of impending interest rate cuts and his stance on recent economic data, which some view as enigmatic.

Looking abroad

In the global sphere, the European Commission's investigation is unfoldeing into tech giants Apple (AAPL), Google’s parent Alphabet (GOOG) and Meta Platforms (META) under the Digital Markets Act. It’s probing potential unfair practices in app store dominance and personal data use for advertising, with far-reaching ramifications for their revenue streams.

Simultaneously, geopolitical tensions are continuing as China escalates its trade war with the U.S., targeting tech titans Microsoft (MSFT), Intel (INTC) and Advanced Micro Devices (AMD by phasing out their products from government infrastructure—a significant move in the ongoing standoff.

Amid these developments, bitcoin is experiencing a modest recovery from previous lows, hovering near $67,000, while gold and oil exhibit slight gains. However, the looming long weekend and spring break exodus may lead to dwindling trading volume, accentuating the potential for market volatility—a reminder to investors to adhere to their long-term strategies amid shifting market dynamics.

In summary, the week ahead promises a confluence of earnings, economic data, regulatory scrutiny,and geopolitical tension, shaping a landscape ripe for strategic navigation in the financial markets.

JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan

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