A massive “Risk On” week saw the S&P 500 surge to new All-Time Highs, fueled by shifting Fed expectations and a rotation back into high-growth sectors.

The Big Picture

The market mood shifted into high gear this week. While Year-to-Date (YTD) performances remain dominated by massive winners like WTI (+45.8%) and Nikkei 225 (+16.2%), the Week-to-Date (WTD) action tells a story of aggressive dip-buying and short-covering.

The S&P 500 pushed through key resistance levels, closing the week at 7,164.25—a relentless move up that ignored the minor volatility seen earlier in the month.

Asset Performance: Risk-On Mode Engaged

The “Risk On” sentiment was undeniable this week:

• Equities: The Nasdaq Composite led the charge (+7.2% WTD), followed by the S&P 500 (+4.4%) and Russell 2000 (+5.3%).
• Crypto: Bitcoin and Ethereum staged a massive comeback, up +6.8% and +9.7% respectively for the week, clawing back a significant portion of their YTD losses.
• Commodities: A notable divergence occurred as Copper gained +6.1% while WTI Crude plunged -14.1% on the week.
• Currencies: The DXY softened slightly (-0.7%), providing a tailwind for risk assets.

  

Industry & Factor Performance

Growth and momentum were the clear winners this week.

• Software & Cloud: After a rocky start to the year, Software (+13.0%) and Cloud (+12.5%) were the top-performing industries this week.
• The Laggards: Energy and Oil Services were the primary detractors, falling -3.3% and -2.1% WTD as crude prices cooled.
• Factors: “Quantum Computing,” “Bitcoin Sensitive Equities,” and “High Short Interest” names saw massive squeezes, with several factors recording +15% to +34% moves over the last month.

  

   

The Fed & Volatility

The Fed Funds Rate (FFR) expectations continue to bake in a path toward 3.13% by September 2027. The market is currently pricing in an effective rate of 3.64%. Despite the rally, the VIX remains elevated at 17.48%, suggesting that while the bulls are in control, they remain wary of sudden shifts in the macro environment.

S&P 500 Technicals: At All-Time Highs

The S&P 500 chart shows a “relentless move up” over the last 5 sessions. We have broken out of the descending channel that constrained price action in March and early April. We are now trading at the top of the long-term trend channel, with the SPY Weekly Straddle pricing in a +/- 1.4% move for the coming week.

The Week Ahead: Earnings & Eco Data

The spotlight shifts to a massive earnings week and critical economic releases.

Key Economic Dates:

• April 21: Retail Sales; Business Inventories; Pending Home Sales; Warsh.
• April 23: Kansas City Fed Mfg Index; Flash PMIs.
• April 24: Univ of Michigan Sentiment.

The Fed is in blackout period as next week we have the FOMC Meeting.

Major Earnings to Watch:

• Tuesday: Tesla (TSLA), Visa (V), UPS, Lockheed Martin (LMT).
• Wednesday: Meta (META), IBM, AT&T (T), Boeing (BA), ServiceNow (NOW).
• Thursday: Intel (INTC), Microsoft (MSFT), Google (GOOGL), Snap (SNAP).

As we head into the heart of Big Tech earnings, the question remains: Can the fundamental growth support these new All-Time Highs, or is the market “priced for perfection”?

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