- The Range
- Posts
- Calm Index, Nervous Market
Calm Index, Nervous Market
Investors weigh political and economic crosscurrents ahead of Donald Trump’s address and key reports.
👋 Hello and welcome to Monday! 🌅
Here’s what we’re watching:
Stocks ended the week higher, but volatility just printed its 8th straight higher weekly low.
Nvidia earnings take center stage for AI-trade watchers.
Donald Trump speaks after tariff curveball from the Supreme Court.
Home Depot and Lowe’s offer a read on shoppers.
Federal Reserve speakers hint at rate-path disagreements.
Let’s goooo! 🏃♂️➡️🏃♂️➡️🏃♂️➡️
🔍Big macro, key earnings define the week
This week, it’s all about Nvidia earnings and President Donald Trump's State of the Union address, fresh off a court setback. Meanwhile, remarks from Christopher Waller and other voices at the Federal Reserve could offer fresh clues on where rates might head as inflation cools but jobs stay sturdy.
Housing price data and wholesale inflation numbers later in the week add more puzzle pieces for investors trying to gauge how fast the economy, and policy, might shift.
💵 What’s the market pricing in for the week ahead?
ℹ️ WHY IS THIS IMPORTANT?
Knowing what the implied weekly range is helps traders set expectations for what the likely trading limits will be. This can help prevent overreaction near quantified range extremes, while also providing perspective on whether there is still room for an intra-week rally or sell-off to run.
📝 Note: This same logic can also be applied to the “Where’s the Action At?” section below.
Click here 👈 to learn more about our charts.
📈 Nvidia and key consumer stocks could send big messages
Midweek markets get a reality check when Nvidia reports, with traders listening closely for what Jensen Huang says about AI demand, spending discipline across Big Tech, and chip access to China. The company’s last update fueled the AI frenzy—this one tests whether the hype still has legs.
In media land, Warner Bros. Discovery and Paramount Skydance step into earnings season while takeover chatter lingers, especially after renewed deal curiosity involving Netflix.
Retailers Home Depot and Lowe’s report with housing softness still weighing on DIY demand, while tech updates from Snowflake, CoreWeave, Workday, Dell, and HP help round out the corporate pulse check.
Weekend attention shifts to Berkshire Hathaway, whose latest results mark the first since Warren Buffett passed leadership to Greg Abel.
🤔 Which companies are poised to possibly over- or underreact to earnings this week?
The largest company to report earnings this week, Nvidia, has a history of trading slightly beyond the market makers’ expected range during the trading session immediately following earnings (keep reading below the next table for more details on how this is calculated).
Of the 20 largest companies reporting earnings this week, Bank of Nova Scotia has the strongest tendency to overshoot the implied price range immediately following earnings.
On the other side of the coin, of the top 20 companies reporting this week, Enel Chile SA shows the greatest likelihood of staying inside its post-earnings expected range (keep reading below the next table for more details).
👇 Below is a look at this week’s biggest earnings reports, sorted by market cap:
HOW CAN TRADERS USE THIS INFORMATION?
For active traders looking to trade some of this week’s earnings plays, the highlighted columns on the table above show the implied (expected) post-earnings move for each company, along with the Average 1-Day Realized Volatility Post-Earnings Ratio (1D RV).
📈 Implied Move: The market’s best guess at how much a stock will swing after earnings.
📊 1D RV: A powerful tool that represents the post-earnings price move divided by the expected price move over the past 12 quarters. In other words, it measures how good (or bad) the market is at pricing each company’s earnings.
💵 When you see a ratio >1.0, it indicates that, historically, the earnings are mispriced and the stock moves MORE than the market anticipates, favoring straddle buyers.
🪝 A ratio <1.0 tells the opposite story, meaning the stock historically moves LESS than the market anticipates, which favors straddle sellers.
Happy hunting.
🍎 Five New Apple Products Expected Next Week: Apple is reportedly gearing up to unveil five new products next week in what sounds like a mini hardware blitz, giving fans yet another reason to start mentally justifying why they “definitely need” an upgrade. Read more
🧸 Tech companies are making their robots cute to try and win over humans: Tech firms are leaning hard into adorable robot designs—big eyes, soft edges, Pixar-adjacent vibes—in a calculated effort to make us feel less “robot uprising” and more “aw, can it follow me home?” as automation creeps further into daily life. Read more
🚀 Elon Musk Twitter takeover trial jurors sworn in as $44bn battle heads to court: Jurors have officially been seated in the blockbuster trial over Elon Musk’s $44 billion Twitter takeover saga, setting the stage for a courtroom showdown that could determine whether the billionaire’s on-again, off-again deal drama crosses the line into legal liability. Read more
Giphy
🏦 JPMorgan says it closed Trump’s bank accounts month after Jan. 6 attack: JPMorgan confirmed it shut down Donald Trump’s bank accounts about a month after the January 6 Capitol attack, a decision now under scrutiny as Trump argues political bias while the bank says it was standard risk management—not exactly your average account closure notice. Read more
🤖 karate China showcases humanoid martial arts robots – should Europe be worried?: China rolled out humanoid robots performing martial arts and acrobatics in a high-profile showcase that doubles as a tech flex, prompting fresh debate in Europe about whether it’s time to step up its own robotics game before the kung-fu bots start stealing more than just applause. Read more
The energy sector (XLE), technology sector (XLK), and real estate sector (XLRE) are currently the high-octane trio leading the pack in implied volatility.
Next week, investors in the energy sector (XLE) will be laser-focused on the latest EIA crude inventory data to gauge if global supply is finally tightening. Over in the technology sector (XLK), all eyes are on mid-quarter guidance updates from semi-conductor heavyweights to see if the AI boom still has legs. Meanwhile, the real estate sector (XLRE) will be sensitive to the upcoming existing home sales report, as market participants look for any sign that mortgage rate stabilization is actually coaxing buyers off the sidelines.
On the flip side, the utilities sector (XLU), health care sector (XLV), and consumer staples sector (XLP) remain the market’s favorite weighted blankets, boasting the lowest implied volatility. These "defensive darlings" are where investors are hiding out for a smoother ride amidst the noise.
For the utilities sector (XLU), the focus shifts to regulatory rate case filings that could impact long-term dividend safety. In the health care sector (XLV), the most important catalyst will be a string of clinical trial readouts for high-profile weight-loss drugs. Finally, investors in the consumer staples sector (XLP) are watching retail foot traffic data and private-label competition levels to see if brand loyalty is holding up against inflationary pressures.
ℹ️ WHY IS THIS IMPORTANT?
For options traders in particular: Implied volatility sets the tone for option prices. Understanding where large or small implied moves are priced in helps traders decide whether options are over- or under-valued before placing trades.
Monday
Factory orders
Fed Speakers: Fed Governor Christopher Waller
Top Earnings: Dominion Energy, Oneok
Tuesday
President Donald Trump delivers State of the Union address
S&P Case-Shiller home price index, Wholesale inventories, Consumer confidence
Fed Speakers: Fed Governor Lisa Cook, Fed Governor Christopher Waller, Boston Fed President Susan Collins, Richmond Fed President Tom Barkin, Chicago Fed President Austan Goolsbee, Atlanta Fed President Raphael Bostic
Top Earnings: Home Depot, Bank of Nova Scotia, American Tower, Keurig Dr Pepper, Workday, HP
Wednesday
Top Earnings: Nvidia, TJX, Salesforce, Lowe’s, Bank of Montreal, Synopsys, Medline, Snowflake, Agilent Technologies, Paramount Skydance
Thursday
Initial jobless claims
Fed Speakers Fed Vice Chair Michelle Bowman
Top Earnings: Royal Bank of Canada, Toronto Dominion, Intuit, Canadian Imperial Bank, Dell, Warner Bros. Discovery, Baidu, CoreWeave
Friday
Producer price index
Construction spending, Chicago Business Barometer
Saturday
Top Earnings: Berkshire Hathaway
The S&P 500 managed to notch a gain as the recent exodus from cyclicals and tech finally caught its breath. But beneath the surface, nerves are still very much clocked in: the Cboe Volatility Index logged its eighth straight higher weekly low, hinting traders are still stocking up on portfolio insurance.
Translation: bigger-than-usual daily swings may keep showing up to the party, as long as this trend continues.
📝 EDITOR’S NOTE
Each day the market is open, we update our comprehensive performance charts on our website for you to view. In addition, be sure to follow us on X for timely intra-week updates.
📋Here’s a curated list of top value-added insights that uncover what’s happening way beyond the usual financial media headlines.
Giphy
Please be sure to follow us on X.
If you like what we're doing, please forward us to a friend. If you're not already subscribed, join our growing family of free subscribers.
Reply