Swings ahead of earnings season
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.