Key Takeaways

  • This upcoming week sees a diverse array of earnings including Netflix, United Airlines, and Snap.
  • U.S. existing home sales are announced this upcoming Thursday, and new home sales are announced Friday.

Markets ended the week up, with the S&P 500 returning 1.4%. The returns were broad across sectors with 10 out of the 11 S&P sectors ending the week higher. The sole sector left out was the communications sector. The benchmark ETF for the sector, XLC had a total return of -0.1% for the week. Communication stocks were dragged down as communications titan Facebook (FB) ended the week lower by -2.1%

The best performing sector was the utilities sector. That sector's benchmark ETF, XLU, returned 3.7% for the week. A contributing factor to the sector's strong performance is anticipation of the increased federal spending on green energy infrastructure called for by President Biden's $2 trillion infrastructure plan. Big utility names trading higher include Duke Energy (DUK) and NextEra Energy (NEE). Cryptocurrency exchange operation Coinbase Global (COIN) ended the week at $344 a share. This is lower than the $381 it started trading at on Wednesday when it went public via direct listing, but higher than the $328 a share it was trading at by close on Wednesday.

5-Day Total Return Chart for S&P 500, XLU, XLC, DUK, FB, COIN, and NEE

This week we're looking at the next phase of earnings season and checking in with the U.S. housing market. But first, let's see how different asset classes have been doing.

Events Next Week

Sunday, April 18:

  • Japanese Trade Balance (March)

Monday, April 19:

  • People's Bank of China Loan Prime Rate Decision
  • Canadian Housing Starts (March)

Tuesday, April 20:

  • Netflix (NFLX) and United Air Lines (UAL)
  • U.K. Unemployment Rate (February)
  • U.K. Unemployment Claimant Count Change (March)
  • Germany Producer Price Index (PPI) (March)

Wednesday, April 21:

  • Market Holiday in Brazil for Tiradentes Day and in India for Ram Navami.
  • U.K. Consumer Price Index (CPI) (March)
  • Canadian CPI (March)
  • Bank of Canada Monetary Policy Report and Interest Rate Decision

Thursday, April 22:

  • AT&T (T), American Airlines (AAL), Snap (SNAP)
  • European Central Bank Monetary Policy Statement and Interest Rate Decision
  • U.S. Existing Home Sales (March)
  • Japanese Core CPI (March)

Friday, April 23:

  • U.K. Retail Sales (March)
  • U.K. Preliminary Manufacturing and Services Purchasing Managers Indexes (PMIs) (April)
  • French Preliminary Manufacturing and Services (PMIs) (April)
  • German Preliminary Manufacturing and Services (PMIs) (April)
  • Eurozone Preliminary Manufacturing and Services (PMIs) (April)
  • U.S. New Home Sales (March)
  • U.S. Preliminary Manufacturing and Services (PMIs) (April)

Earnings Watch

So far so good for corporate report cards. As of Friday, 88% of companies that have reported earnings have beaten their 1Q 2021 earnings per share (EPS) estimates by an average of 22%, according to the Earnings Scout. Companies usually beat their forecasts — that's the little game they like to play with analysts — but typically only by 3% to 6%. 

Next week we'll get results from around 200 companies, including United Airlines. Delta told us this past week that business bookings look really strong for the fall. Is United feeling those friendly skies?

We'll also hear results from Netflix. 2020 was the first year Netflix's dominance was challenged by the likes of Disney+ and other streaming foes. The company usually responds to challenges by pumping billions of dollars into new content, and then raising prices to pay for it. That's worked in the past, but there are a lot more options today than in Netflix's glory years.

Housing Watch

We'll also get key reports on the U.S. housing market next week with existing home sales on Thursday and new home sales and construction permits on Friday. The average single-family home in the U.S. has seen its value rise by an average of 17% in the past year, according to Redfin. Some cities like Austin have seen prices rise by 50%.

At the same time, there is an incredible housing shortage in the U.S., with only slightly more than 1 million homes available for sale, according to the National Association of Realtors (NAR). Lumber prices are up 60% in the past 12 months, so we have a classic supply and demand problem in the housing market, and no signs of it abating anytime soon.