Despite small but steady growth for the most part of the week, Friday’s selloff pushed U.S. indices into negative territory. On the week, S&P 500 lost 1% and broke two-week winning streak. Nasdaq 100 and Russell both closed the week in a negative territory, too, losing 1.3% and 1%. Corporate reports were mostly in line with analysts expectations, however, official guidance from some companies pointed out to weaker results in the future, also causing some pressure on stocks. Greece default fears and China tightening control over short-selling and lending to small investors were two main factor that significantly weighed on investors mood on Friday, triggering the selloff. Chinese market regulator attempts to stop emerging of a stock bubble and cool down an overheated market. Macroeconomic data released during the week was mostly in line with forecasts and estimates, except for jobless claims, which rose to 294,000 compared to 280,000 forecast. Conversely, retail sales increased for the first time in three months, +0.9%, and were pretty close to what analysts expected. As for consumer prices, they also rose for the second consecutive month and were in line with analysts expectations. Regarding awaited interest rate hike, Dennis Lockhart, the Atlanta Fed Reserve President in his speech on Thursday mentioned about “notably weak” Q1 data and hinted that the interest rate hike may be postponed.
The VIX Index finished the week higher, rising 10.4% to 13.89. Remaining below 15 signals that investors continue to believe that the market still has some room to go up and the long-awaited correction may be delayed. However, treated as a contrarian indicator, the “fear index” may signal right the opposite, a potential correction in front of us.
Now, on to the charts and numbers.
On the corporate front, the best performing sector was energy, which rose 2.21% on the positive dynamics of the crude oil itself. The financial sector, despite pretty good corporate earnings reports finished the week just south of the breakeven, losing 0.45%.
Among commodities, this week was a huge win for the crude oil, which set a few year highs. Supported by multiple factors, like rumors on oil production cuts from OPEC, rose in the domestic supply lower than expected, and fighting in Yemen, crude oil ETF gained 7.8% percent. As for the gold, its dynamics was more boring, closing the week with a small loss of 0.3% due to strong dollar.