Weekly: After Healthy & Normal Pullbacks, Share Your Strategy to Gloomy Q1 Earnings

1. Market Gives Mixed Signals

With the start of earnings season just around the corner, the major U.S. stock indexes didn’t make any big daily movements during a holiday-shortened trading week that concluded on Thursday, prior to Friday's monthly jobs report.

The $S&P 500(.SPX)$ slipped 0.1%, the $NASDAQ(.IXIC)$ fell 1.1%, and the $DJIA(.DJI)$ added 0.6%.

As of last Friday, the$Straits Times Index(STI.SI)$ gained 1.28% last week and$S&P/ASX 200(XJO.AU)$ gained 0.57% weekly.

2. Sectors and Stocks of $S&P 500(.SPX)$

From the below table, we can see the communication services, healthcare, utilities, energy four sectors see rose over 3%. And Industrials sector see -2.19% drop.

The major indexes held up well in a holiday-shortened trading week, with midweek pullbacks looking healthy and normal. But many sectors and leading stocks sold off hard, including Tesla stock.

Weekly data from finviz.com

The top 10 winners of$S&P 500(.SPX)$ are $UnitedHealth(UNH)$, $Eli Lilly(LLY)$, $Johnson & Johnson(JNJ)$, $Marathon(MRO)$, $ServiceNow(NOW)$, $APA Corporation(APA)$, $Alphabet(GOOG)$, $Alphabet(GOOGL)$ , $Moderna, Inc.(MRNA)$ , $ConocoPhillips(COP)$

Data from TigerTrade

3. Macro Factors and Other Assets

Small caps lag again: as financial system stresses continued to weigh on smaller companies, $iShares Russell 2000 ETF(IWM)$ fell around 2.6% for the week, a decline of more than 12.0% since recent high on February 2.

Jobs resilience: A monthly gain of 236,000 U.S. jobs that was reported on Friday was the lowest since December 2020, but it marked the 27th straight month of solid job growth.

Earnings decline: Expectations are low heading into earnings season, as of Friday, analysts surveyed by FactSet were expecting companies in the $S&P 500(.SPX)$ to post an average earnings decrease of 6.8% YoY—the biggest earnings decline since the second quarter of 2020.   

Gold shines: The price of $Gold - main 2306(GCmain)$ was trading as high as $2,037 on Thursday. The price has spiked about 12% since a recent low on March 8.

Crude awakening: The $WTI Crude Oil - main 2305(CLmain)$ on Monday surged  more than 6%, Crude futures have surged 20.9% in three weeks. Saudi Arabia and other leading members of the OPEC consortium of oil-producing nations announced plans to cut production.

The week ahead: April 10-14

Gloomy Q1 corporate profits is coming:

$Tilray Inc.(TLRY)$ , $CarMax(KMX)$, $CALERES INC(CAL)$ , $JPMorgan Chase(JPM)$ , $Citigroup(C)$ , $Wells Fargo(WFC)$ , $BlackRock(BLK)$ , $UnitedHealth(UNH)$, $PNC Financial Services Group Inc(PNC)$

Analysts cut their outlook pretty aggressively as the economic outlook deteriorated during the first quarter.

If this comes to pass, it would mark the worst quarterly contraction since the third quarter of 2020.

UBS said in a research note this year that U.S. stocks are trading at a 15-year high. On the profitability side, with high interest rates and regulatory pressures unlikely to ease, it will be difficult for U.S. companies to further expand their margins.

Technically, when corporate earnings shrink for two quarters in a row, it qualifies as an "earnings recession." Historically, S&P 500 firms' reported earnings per share have always fallen during economic recessions, according to quarterly data compiled by Standard & Poor's that was cited by Yardeni Research.

In this season ,companies with strategies for improving pricing power, enacting cost cuts or imposing more disciplined expense-management will likely be rewarded.

Welcome to Read: 4 things could shield stocks as Goldman warns of worst earnings season since pandemic

Key events the coming week:

Monday

• Wholesale inventories, U.S. Census Bureau 

Tuesday

• No major reports scheduled

Wednesday

• Consumer Price Index, U.S. Bureau of Labor Statistics

• Federal budget, U.S. Department of the Treasury  

Thursday

• Weekly Producer Price Index, U.S. Bureau of Labor Statistics

• Unemployment claims, U.S. Department of Labor

Friday

• Retail sales,U.S. Census Bureau

• Business inventories, U.S. Census Bureau

• University of Michigan Index of Consumer Sentiment, preliminary result

• Export and import prices, U.S. Bureau of Labor Statistics

• Industrial production and capacity utilization, U.S. Federal Reserve

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