Market Driver: Alphabet (GOOG) and Amazon (AMZN) Report Earnings After the Closing Bell!

Stocks opened flat and turned modestly lower into midday Thursday. The S&P 500 is down 4.28 points to 2,162.30 and few points from session lows.

Nine of ten market sectors are seeing losses, led by Telecomm (IYZ), Basic Materials (XLB), and Industrials (XLI). Utilities (XLU) bucked the bearish trend and are sporting modest gains.

Crude oil is off 50 cents to $41.40 and gold gained $9 to $1343.50.

Meanwhile, Treasury bonds are trading quietly after Fed officials concluded a two-day meeting Wednesday afternoon and, while keeping rates unchanged as expected, didn’t color outside the lines in the post-meeting commentary. The yield on the benchmark ten-year is flat at 1.51% Thursday.

CBOE Volatility Index added .45 to 13.28 amid a modest uptick in options volumes. Roughly 4.4 million calls and 3.2 million puts traded across the exchanges. Projected volume for the day is 5.7 million and in-line with the one-month daily average.

SDPR 500 Trust (SPY) August 222, 220, and 217.5 calls are the most actives.

Looking forward, the economic calendar remains chock full of data with GDP, manufacturing (Chicago PMI) and consumer sentiment (University of Michigan) Friday morning. Then a flood of numbers are due out next week, concluding with monthly jobs data on August 5^th.

Meanwhile, corporate earnings continue to roll in. Alphabet (GOOG) and Amazon (AMZN) are among the myriad of companies due to report after the closing bell today and the brisk pace continues through next week.

The earnings results and economic news over the past two weeks have failed to move the market in any meaningful way. Even yesterday, for instance, when the FOMC concluded its latest meeting on monetary policy, the S&P 500 finished the day down just 2.6 points and basically flat for the day.

The chart below shows the recent action in the SPDR 500 Trust (SPY) and how the daily moves in the ETF have become progressively smaller from one day to the next. This might reflect a sense of investor uncertainty regarding the market’s next move, as the S&P 500 struggles to make a decisive move beyond previous record highs. This is the type of “consolidation” that can lead to an eventual breakout move once a direction has been determined.

See Tradespoon’s Stock Forecast on SPDR 500 ETF Trust (SPY)

Tradespoon’s Stock Forecast on SPDR 500 ETF Trust (SPY)

Until then, these small daily ranges in the broader market suggests a pattern of mixed trading, with some sectors outperforming others from one day to the next based on earnings results. Gains in some areas offset the losses in others and the net result is choppy, and seemingly aimless, trading.

However, just because the market seems to be trading flat from one day to the next, that doesn’t necessarily mean that there aren’t notable moves higher or lower below the surface of the S&P 500. There are certainly specific sectors and stocks that are making strong vertical moves in reaction to earnings news flow.

In conclusion, mixed and choppy trading is the broader theme as we navigate the earnings reporting season, but watch for a potential breakout move in coming weeks as the market digests a hefty dose of economic stats as well.