Swings ahead of earn­ings sea­son

The Washington Post Sunday - - MARKETS -

touch­ingTech U.S. mega­caps­stock ev­ery­thing mar­ke­tas mea­sured­from tur­bu­lence­s­tocks by to the Trea­surys.has Nas­daqbeen 100 in­dex al­ter­nated be­tween big gains and losses each day in the hol­i­day-short­ened week, while the CBOE vo­latil­ity in­dex hit the high­est level since May.

Swings in the Nas­daq have av­er­aged al­most 1 per­cent a day since June 9, push­ing its 30-day vo­latil­ity rel­a­tive to the rest of the mar­ket to the high­est since 2002.

In the past, cor­po­rate earn­ings re­ports have been a re­li­able an­ti­dote: Their ar­rival each quar­ter has lifted stocks 100 per­cent of the time since 2013. Among in­vestors, how­ever, the sense now is that fail­ure to de­liver would have large con­se­quences.

“It’s rea­son­able to think that the soft­ness in the eco­nomic cy­cle could trans­mit into earn­ings,” said Stephen Wood, a chief mar­ket strate­gist at Rus­sell In­vest­ments. “In a good but de­cel­er­at­ing earn­ings en­vi­ron­ment and with the Fed­eral Re­serve pulling back on mon­e­tary pol­icy, fun­da­men­tals are go­ing to be chal­lenged to sup­port th­ese val­u­a­tions.”

The U.S. trea­sury will sell $39 bil­lion of three-month bills and $33 bil­lion of six-month bills Mon­day. They yielded 1.04 per­cent and 1.14 per­cent in when-is­sued trad­ing. It will also sell four-week bills and $24 bil­lion of three-year notes Tues­day, $20 bil­lion of 10-year notes Wed­nes­day and $12 bil­lion of 30-year bonds Thurs­day.

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