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If you're keeping score at home - and let's face it, we're all keeping score - the Invesco QQQ Trust Series 1 (QQQ) squeaked out another weekly win last week.
However, during the same timeframe, the iShares Russell 2000 ETF (IWM) dropped another 0.8% for the week.
Those two numbers tell you all you need to know about the "bifurcated market." But there's more to the market than meets the eye with the QQQ...
Many people think earnings season is over. They're wrong.
There are still 799 companies set to announce their quarterly earnings results this week...
What? How can there be almost 800 companies reporting results this week CJ?
Simple, we're done with the headliners, now we're working our way through what really makes the market work...
But before we go too far down that road, how about we look at the "headliners" ...
According to Factset, 92% of the S&P 500 companies have reported their earnings results for the quarter, with 78% of them besting analyst expectations. That's an impressive number for a market that most, including myself, worried was in dire straits.
So, we're all good from a bullish perspective, right? Maybe.
I've got another key percentage for you in just a minute - but let's look at the market first...
From a 10,000-foot view, we can see how the market typically fairs in the coming weeks.
According to the calendar, we just finished up Week 19 for the markets. Well, according to my seasonality data, the market is closing out a historically strong period as we enter the next six weeks.
Now, this data is usually good for a general "feel" of where the market is heading based on historical averages. It's important to remember exactly WHAT the drivers may be that induce seasonal trends. At this point - the beginning of Week 20 - it's simple.
During this time of year, we're always heading into a period of slower earnings for the S&P 500 and switching gears to the IWM's earnings. These lower-profile earnings catch less attention but are just as important, if not more, to the macro outlook. Here's why...
Small-cap companies are the lifeblood of the economy. Sure, companies like Amazon.com Inc (AMZN), Microsoft Corp (MSFT), and Alphabet Inc (GOOGL) represent the large-cap swath of the economy, but small-cap companies are like the consumer retailer... They make things work.
And this brings me to my focus for the week: the consumer.
To get the full picture, let's look back at last week for just a minute.
For the first time since 2021, Bank of America Corp's (BAC) credit-card data showed year-over-year slowing. At the same time that the consumer is slowing their activity, it's assumed that credit issuers are also tightening available credit in the wake of the recent regional bank scare.
Then, on Friday, the University of Michigan's Sentiment Index for May (preliminary) came in about four points below the market's expectations. This decline captures an essence of consumer sentiment that is starting to re…
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.