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Stubbornly High VIX Levels Await Another Big Week of Data
From inflation gauges to retail giants, this week could reset expectations fast.
👋 Hello and welcome to a holiday-shortened week! 🌅
Here’s what we’re watching:
Volatility looks teed up, with VIX sitting near 3-month highs.
More delayed data and inflation are in the spotlight again this week.
Friday’s PCE report headlines backlog from shutdown pause.
Walmart leads the earnings parade; John Deere, Analog Devices, Palo Alto Networks, Carvana, DoorDash follow.
Let’s roll! 🛼🛼🛼
🔍Inflation, Growth, and Fed Minutes Await
Markets are gearing up for a fresh inflation temperature check Friday when December’s PCE report, the metric closely watched by the Federal Reserve when plotting its rate path, drops. CPI showed prices holding steady last month, so traders will be parsing this release for confirmation (or contradiction). Minutes from the Fed’s January meeting should add more color on how policymakers are sizing up the economy behind closed doors.
Thursday brings the first snapshot of fourth-quarter GDP, following a strong third-quarter showing that the Bureau of Economic Analysis last pegged at 4.4% after revisions.
Housing data will also crowd the calendar, with new home sales and housing starts for November and December, plus January pending home sales offering a forward-looking read on demand.
Add in two trade reports and December durable-goods orders, and investors will have plenty of fresh numbers to chew on about manufacturing momentum and global demand.
💵 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.
📈 Retail’s Trillion-Dollar Titan Reports, and the Smart Money Files Start Rolling In
Walmart steps up with its first earnings release under new chief John Furner, fresh off crossing the $1 trillion market-cap milestone—territory no big-box retailer had charted before. Last quarter, the company logged a 4.2% comp-sales gain and even nudged its full-year outlook higher, so investors will be watching to see if momentum still has legs.
On deck after that: results from John Deere, which recently warned full-year profits could undershoot expectations amid rough farm-sector conditions. Its numbers often double as a read-through on industrial and agricultural demand.
Tech earnings will also trickle in from Analog Devices, Palo Alto Networks, and Cadence Design Systems, giving markets a cross-section of chip, security, and software spending trends.
Meanwhile, Wall Street’s favorite transparency season kicks off as fresh 13F filings begin landing, revealing how heavyweight investors, including Berkshire Hathaway led by Warren Buffett, reshuffled portfolios last quarter. Any sizable moves could carry extra intrigue, given they may rank among the final allocation calls of Buffett’s storied run.
🤔 Which companies are poised to possibly over- or underreact to earnings this week?
The largest company to report earnings this week, Walmart, 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, Newmont 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, Groupo Televisia Sab 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.
📉 Japan fourth-quarter GDP reverses into growth but misses expectations as rebound underwhelms: Japan’s economy returned to growth in Q4 after a prior contraction, but the rebound fell short of expectations as weaker consumer spending and business investment kept the recovery from gaining real traction, giving policymakers a win that feels more technical than triumphant. Read more
📊 Basel mortgage capital rules could reshape the housing market: New Basel capital standards may require banks to hold more reserves against mortgage loans, potentially tightening lending and nudging borrowing costs higher as financial institutions recalibrate risk in a housing market already juggling elevated rates and limited supply. Read more
🤖 Meta’s AI chatbots are talking to kids and parents are raising questions: Meta is expanding AI chatbot tools that can interact with younger users, triggering fresh scrutiny over privacy, safety, and whether algorithm-powered “friends” belong in kids’ digital lives or in regulators’ crosshairs. Read more
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🎎 China’s humanoid robots ready for Lunar New Year showtime: Chinese robotics companies are unveiling increasingly sophisticated humanoid robots for Lunar New Year performances, spotlighting rapid AI and engineering gains as the country aims to turn festive stage time into a serious commercial robotics push. Read more
🚀 SpaceX enters Pentagon’s contest to build voice-controlled military drone swarms: SpaceX has joined a Pentagon competition to develop voice-controlled drone swarms, deepening its defense ambitions as AI-driven autonomous systems become a central focus in the race to modernize military operations. Read more
In the high-octane corner of the market, energy (XLE), technology (XLK, Technology), and real estate (XLRE) are currently leading the pack as the most volatile sectors.
While tech and energy are usual suspects for price swings, real estate’s presence highlights the market's current sensitivity to shifting macro trends.
This week, XLE investors will be glued to oil inventory reports, XLK traders will scrutinize upcoming semiconductor earnings for AI momentum, and XLRE watchers will focus on Treasury yield movements for signs of relief.
If you’re looking for a smoother ride, the consumer staples sector (XLP), the healthcare sector (XLV), and the industrial sector (XLI) are holding steady as the lowest volatility plays.
For the coming week, XLP investors will watch retail sales data for consumer resilience, XLV will focus on updates from major biotech conferences, and XLI holders will keep a wary eye on manufacturing activity reports to gauge the strength of the broader economy.
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.
Tuesday
Empire State manufacturing (February)
Fed Speakers: Fed Governor Michael Barr, San Francisco Fed President Mary Daly
Top Earnings: Medtronics, Palo Alto Networks, Cadence Design, Kenvue
Wednesday
Housing starts (December, November)
Durable-goods orders (December), January Federal Reserve meeting minutes
Fed Speakers: Fed Vice Chair Michelle Bowman
Top Earnings: Analog Devices, Booking Holdings, Carvana, Moody’s, DoorDash, Occidental Petroleum
Thursday
U.S. trade deficit (December)
Initial jobless claims (Week ending Feb. 14), U.S. trade balance (December), Retail inventories (December), Wholesale inventories (December), Philadelphia Fed manufacturing (February), Pending home sales (January)
Fed Speakers: Federal Reserve Officials Speaking: Fed Vice Chair Michelle Bowman, Chicago Fed President Austan Goolsbee, Minneapolis Fed President Neel Kashkari
Top Earnings: Walmart, Deere & Co, Newmont, Southern
Friday
Personal Consumption Expenditures (PCE) price index (December)
Gross Domestic Product - first reading (Q4), S&P flash Purchasing Manager Index (February), New home sales (December, November), Consumer sentiment - final (February)
Fed Speakers: Atlanta Fed President Raphael Bostic
Volatility, as measured by the Cboe Volatility Index (VIX), starts the week parked in the 7th decile of all post-1994 closes. In plain English: with the S&P 500 still less than 2.5% off its all-time high, this warns of a market that remains chronically nervous about something.
Until the VIX, which closed Friday’s session at 20.59, drops back below 17 and snaps its higher-lows streak dating to Christmas Eve, outsized daily swings remain very much on the table.
📝 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.
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