Good Evening Even with Friday's rebound in stocks, the market closed lower last week and the last few weeks have definitely seen a rise in fear and volatility. Investors could get a break from that this week. Besides the potential for full approval of Pfizer's COVID vaccine, Fed Chair Powell speaks on Friday and could give the market something to cheer. Powell is one of the most dovish (accommodative) Fed chairs we've had and consistently has tried to calm the market and I think he's found a few more reasons the market isn't watching yet.

Let's Talk Money!

MARKETS

	NASDAQ	14,714	+ 1.19%
	S&P	4,441	+ 0.81%
	DOW	35,120	+ 0.65%

• Markets:  All three major indexes closed higher Friday though closed slightly lower for the week. Growth and small-cap stocks resumed leadership as investors hoped the worst of the selloff might be over. The continued crash in the price of oil was the biggest change for the week with WTI falling 9.7% to its lowest point since May. It's a COVID-driven selloff with investors worried the delta surge will detract from economic growth and energy demand but we should see signficiant support above $60 a barrel and a rebound once delta has peaked.

BEST AND WORST SECTORS

• Sectors: All 11 stocks sectors closed higher Friday with growth sectors like Technology, Consumer Discretionary and Communication Services leading the rebound. The outperformance in Utilities stocks was interesting as it wasn't accompanied by other yield-sensitive, safety sectors like Consumer Staples or Real Estate. Utilities is now the top-performing sector over the past month with a 6.76% return versus just 2.74% for the broader S&P 500.
• Sector Trends: Just five of the 11 stock sectors closed higher on the week with notable weakness in cyclical sectors; Energy, Financials, Industrials and Materials. It was a delta-driven week with daily COVID cases rising and investors worried more restrictions would mean slower growth. Utilities and Healthcare were the standount winners with gains of 1.8% each on the week.

TOP STOCKS

• NVIDIA jumped on strong earnings growth and upgrades by analysts even as the company reported that the proposed acquisition of ARM will likely be delayed for further review by U.K. regulators. The chipmaker reported earnings of $1.04 per share, up 89% from last year and 14% from the first quarter. The quarter-over-quarter growth was important as it showed earnings can withstand a temporary slowdown in crypto mining components.
• Abiomed announced it had received a breakthrough device designation from the FDA for its Impella ECP heart pump, implying a prioritized review process for the device by the regulator.
• Lumen Technologies clawed back some of its massive selloff since June though shares are still down 22% from the peak. The company provides IT solutions to telecom carriers and announced Friday that it would expand its cloud edge service.

What to Watch

Chances of an Upside Surprise this Week for Stocks

Investors will have to wait until Friday for the big news of the week when Fed Chair Powell is expected to lay out plans for reducing the central bank’s $120 billion in monthly bond buying. It’s a key step forward in withdrawing easy money stimulus on the way to higher interest rates and is the #1 factor in market volatility lately.

But the chance of an upside surprise is rising. The market has priced in the odds of Powell defining how quickly the Fed will scale down its monthly bond buying but there are a few reasons he might hold back and not signal an immediate slowdown.

COVID cases around the delta surge have yet to peak and Powell has already noted that he wants to wait to see how it affects the economy. We also have the monthly jobs report one week after this Friday, something else Powell could point to as a reason to wait and see more data. With the market already pricing in the worst-case scenario, it could be an opportunity to inject more optimism into the market.

In economic news, New Home Sales will be released on Tuesday and could be more important this month as the housing market has shown signs of weakness. The Personal Income and Spending report (PCE) will also be out on Friday and is an important signal for inflation.

Earnings Expected this Week:

• Monday: Palo Alto Networks, Madison Square Garden
• Tuesday: Best Buy, Nordstrom, Intuit, Toll Brothers, Advanced Auto Parts, Medtronic
• Wednesday: Salesforce.com, Snowflake, Box, Express, Dick’s Sporting Goods, NetApp, Splunk, Pure Storage
• Thursday: HP, Dell, Gap, Dollar General, Dollar Tree, Ulta Beauty, Peloton, Workday, VMWare, Marvell

Stocks

Full Vaccine Approval Could Boost Stocks this Week

Against the fear and volatility of the last few weeks, we could get some good news as early as Monday this week. The Food & Drug Administration (FDA) is expected to grant full approval of the Pfizer COVID-19 vaccine this week according to reporting by The Wall Street Journal. With daily cases surging from the delta variant, it could be a shot of optimism that brings investors back into stocks.

The two-dose shot was first cleared mid-December but under an emergency authorization order, a point many have made to wait on getting vaccinated. Only about 60% of eligible people in the U.S. are vaccinated with 90% of recent hospitalizations from those yet to get both doses. According to a survey by the Kaiser Family Foundation, three in 10 unvaccinated adults say they would be more likely to get vaccinated on full approval.

The potential to reach a higher percentage of vaccinations and closer to herd immunity could be a break of optimism for the markets this week, especially for the hardest hit stocks. Shares of cruise lines and airlines have plunged in the last three months with Carnival Cruise Lines (CCL) down 19% and American Airlines (AAL) down 17% over the period.