A surprise OPEC+ output cut weighed on sentiment this week
The second quarter kicked off this week, but investors remained cautious. Weighing on sentiment was a surprise output cut from the Organization of the Petroleum Exporting Countries and their allies (OPEC+), which sent oil prices surging and boosted energy stocks. The Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite Index (IXIC) backpedaled after job openings data fell for the first time in two years to just below 10 million, while the Cboe Volatility Index (VIX) snapped its seven-day losing streak.
Sentiment didn't improve after the ADP employment report said private payrolls rose a lower-than-expected 145,000 in March, though oil prices somewhat corrected. The Dow was the only benchmark pacing for a weekly win on Thursday after another round of jobs data, which would make it its third-straight, with markets closed on Friday in observance of Good Friday.
Tech Stocks in Focus
Traders kept a close eye on the tech sector, as usual. Electric vehicle (EV) giant Tesla (TSLA) reported record quarterly deliveries, but quarter-to-quarter sales growth failed to impress. Chipmaker Skyworks Solutions (SWKS) pulled back to a historically bullish trendline, while competitor Broadcom (AVGO) could be a semiconductor name to avoid in April. In other news, bulls blasted Palantir Technologies (PLTR) after it expanded its cloud partnership with Microsoft (MSFT), and now looks like a good time to buy the dip on artificial intelligence concern C3.ai (AI).
Tough Week for Retailers
Retail stocks were also in the spotlight, with JPMorgan Securities upgrading Macy's (M) to "overweight" from "neutral." The good news for the sector ends there, with CVS Health (CVS) and Walgreens Boots Alliance (WBA) both flashing historically bearish signals. Costco (COST) announced disappointing comparable sales for March, and Levi Strauss (LEVI) brushed off a top- and bottom-line win for the fourth quarter.
Inflation Data on Tap Next Week
Investors will return from their holiday break to key inflation indicators, as well as bank earnings. Specifically, both the consumer price index (CPI) and the producer price index (PPI) are on tap, in addition to retail sales and consumer sentiment data. Plus, Citigroup (C), Delta Air Lines (DAL), JP Morgan Chase (JPM), and Wells Fargo (WFC) will report quarterly results. Continue to act cautiously toward the SPX, and take a look at this 50% retracement level that is remerging before next week kicks off.