U.S. Stocks remain in a tight trading range, with the S&P 500 closing down 0.15% to 2,271 last week. Since December 7th of 2016, the S&P 500 has not had a daily move up or down of more than 1%. In addition, according to Bespoke, one would have to go back 69 trading days to find the last 1% decline, the longest streak during a bull market in history. Jitters leading up to the Presidential Inauguration last Friday could be the cause for the low volatility.
Checkpoint Software (CHKP), Netflix (NFLX), Skyworks Solutions (SWKS), and Union Pacific (UNP) are among companies that reported solid earnings during the week. Better brand recognition due to investments in the sales team and strong demand for cyber security products drove a nice earnings beat for Checkpoint, while a big gain in international subscribers impressed Netflix investors. For Skyworks and Union Pacific, market participants are beginning to see a turn to growth, driving the stocks higher.
Energy prices lifted the overall rate of consumer inflation as the CPI rose 0.3% in December to take the y/y rate up to 2.1%. The overall rate nearly matches the core rate (2.2%), which excludes food and energy, for the first time since the oil price collapse. In addition, Industrial Production rose 0.8% due to a surge in utility output. U.S. data remains encouraging.
Next week, investors will look at U.S. GDP and consumer sentiment data, while many companies continue reporting quarterly results. Some big names that will report include McDonald's (MCD), 3M (MMM), AT&T (T), Alphabet (GOOGL), and Microsoft (MSFT).