Wall Street Heads Towards Winning Week Despite Fall Volatility

Well-received earnings from major bank names also boosted sentiment

Digital Content Manager
Oct 15, 2021 at 2:03 PM
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Stocks continued to behave in volatile fashion throughout the second week of October, keeping with fall seasonality trends. The Dow fell 250 points on Monday, despite adding nearly as many points at session highs, while surging oil prices stoked inflation fears. The blue-chip benchmark went on to register another triple-digit loss on Tuesday, after news that the International Monetary Fund (IMF) slashed its global growth forecast. A sharp drop in job openings for August, in addition to supply chain issues, led the Dow, the S&P 500, and the Nasdaq to log their third consecutive day in the red.

The S&P 500 and tech-heavy Nasdaq snapped their losing streaks on Wednesday, as investors digested news that the Federal Reserve could begin gradually tapering its monthly asset-purchase program as soon as mid-November. Meanwhile, a higher-than-expected jump in the consumer price index (CPI) still weighed on sentiment.

Stocks charged higher Thursday, however. The Dow scored its best single-session gain since July 20, while the S&P 500 and Nasdaq logged their best wins since March 5 and May 20, respectively. This surge came on the heels of well-received earnings reports from major bank names, as well as the lowest weekly jobless claims reading since the pandemic began. At last check, the three major benchmarks were pacing for weekly wins, thanks to another round of upbeat earnings results, encouraging retail sales data, and Bitcoin's (BTC) surge.

Blue-Chip Stocks Gear up for Earnings

A handful of blue-chip stocks were gearing up for earnings this week. Goldman Sachs (GS) was among them. The finance giant lowered its 2022 forecast for the U.S. economy to an expansion of 4%, down from 4.4%, before stepping into the confessional earlier today.  Another financial concern in the spotlight was JPMorgan Chase (JPM), which slipped despite posting blowout quarterly earnings.

Meanwhile, Walgreens Boots Alliance (WBA) prepared for its Thursday earnings report by announcing two major leadership appointments. Johnson & Johnson (JNJ) is looking ahead to next week's quarterly results, as a key decision regarding its Covid-19 vaccine booster shots hung in the balance. Outside of this slew of earnings reports, Caterpillar (CAT) popped after drawing some bullish analyst attention.

Household Names Making Headlines

There was no shortage of household names in the limelight. Starbucks (SBUX) kicked off the week with an upgrade, after one analyst turned bullish on the coffee chain's U.S. momentum. E-commerce giant Amazon.com (AMZN), on the other hand, pulled back to a historically bullish trendline that could push the equity higher. Speaking of pullbacks, NIKE (NKE) attracted fresh analyst coverage on its attractive entry point, as well as a "powerful brand legacy."

Elsewhere, Qualcomm (QCOM) bounced off annual lows after announcing a new $10 billion stock repurchase program. Bank of America (BAC) was also higher, following a third-quarter earnings and revenue beat. Finally, Netfix (NFLX) cooled down from a record high ahead of its quarterly earnings report, which is due out before the open on Tuesday, Oct.19. 

Earnings Season Kicks Into High Gear Next Week

The third-quarter earnings season will really heat up next week, with financial results from the likes of American Airlines (AAL), American Express (AXP), Fifth Third (FITB), IBM (IBM), Procter & Gamble (PG), Tesla (TSLA), and United Airlines (UAL), to name a few. Traders will also be eyeing industrial production data, building permits, and housing starts. Initial and continuing jobless claims are expected too, in addition to existing home sales data, and the Markit manufacturing purchasing managers' index (PMI). You can get ahead of next week's events by diving into why now is the time to hedge long positions, while also exploring which type of stocks yield better returns.

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