There were some wild movements in the market last week, CPI came in hotter than expected and tensions continued to escalate overseas spiking the prices of oil and gold. All of this culminated with a selloff on Friday that caused the S&P 500 ($SPX) (SPY) to close the week down well over 1%.

Earnings season is back upon us as well with some big names reporting this week in the banking sector along with Netflix (NFLX). Lastly, we have some news releases and increased pressure from commodities and buyback blackouts.

Here are 5 things to watch this week in the Market.

Blackouts

We have entered a period of buyback blackouts in equities. During this period, companies are not allowed to repurchase their shares. This could be a potential headwind in the markets because of the liquidity support this offers on the open market. With earnings here again, we could see some pretty large swings on reports due to a lack of this extra liquidity. This could also potentially threaten the bull run as the repurchase support fades through the beginning of May when the blackouts end.

Earnings

It feels like earnings just left and now they are back again. This week we have Goldman Sachs (GS) and Charles Schwab (SCHW) reporting on Monday. Tuesday Bank of America (BAC) and Morgan Stanely (MS) report, Blackstone (BX) and Netflix (NFLX) report on Thursday, and finally American Express (AXP) report on Friday. 

The big banks hold a lot of the liquidity for both the markets and individual bank accounts. With higher interest rates it can be expected that their interest rate revenue will be higher, but what will also be important to take note of is if they are seeing higher rates of delinquency on mortgage and car loans. 

American Express is a separate beast being a credit card company. Watching their earnings report could set a tone for the rest of the earnings season, especially if they see a large spike in late/non-paying accounts. 

Commodities

Another area that could put some pressure on stocks is higher commodity prices. First, we have oil, the higher oil goes the more likely inflation is to continue to creep up and cause some additional problems with any rate narrative the Fed was trying to achieve this year. With tensions in the Middle East and still an issue with shipping in the Red Sea higher prices could be a headwind for the markets. 

Second is Gold, which has been on a real tare the past week topping out in the mid $2,370’s. The last time gold moved this much in a 2 month period was right before Covid struck signaling fear in the markets. 

Retail sales

Out Monday morning at 8:30 are Retail Sales and Core Retail Sales. Given how much inflation data moved the market last week and how much traders are starting to discount the possibility of any hikes this year, a strong retail sales number could have a detrimental impact on the market. Anything that continues to display strength could continue to cut the possibility of a rate cut this year, and that could cause some additional selling. If we come in lower than expected though, markets could rally on the weaker data.

FOMC Speakers

While there are no official meetings scheduled, several FOMC members continue to speak at several points throughout the week. With inflation being back in the forefront of the news cycle, their comments could be heavily traded causing some volatility during their speeches. What would be particularly troubling to the market would be if some of the more dovish members start to turn.

All eyes will be on the middle east to start the week, so keep an eye on the futures market for a gauge of how the market might open on Monday.

Best of luck this week and don’t forget to check out my daily options article.