Top catalysts for the S&P 500 Index, SPY, VOO, and JEPI this week

The S&P 500 Index and its ETFs, like SPY, JEPI, and VOO, surged to record highs last week, continuing a bull run that started on March 30th this year. It has soared by nearly 13% from its lowest level in March, adding trillions of dollars in value. This article explores some of the top catalysts to watch this week.

US-Iran conflict to continue amid Strait of Hormuz closure 

The main catalyst for the S&P 500 Index and its ETFs, like VOO and SPY, is the ongoing Iran war. On Friday, these assets jumped to a record high after Iran announced that the Strait of Hormuz was open, a statement that President Donald Trump touted on social media and top events.

This situation changed on Saturday after Iran closed the Strait and shot at several ships. Iran has accused the US of not living to the spirit of the agreement, especially after Trump said that the blockade on Iranian ships would continue. Also, the Wall Street Journal reported that the US military was considering getting into Iranian ships.

On the positive side, there is a possibility that the ongoing posturing is part of the negotiation process as the two sides look for more concessions. As such, the Iran war will likely have a minimal impact on Monday and then the situation will normalize later this week.

Earnings season accelerates 

The other main catalyst for the S&P 500 Index will be the ongoing earnings season, which kicked off last week. 10% of companies in the index have already published their results, including the biggest American banks like BNY, Bank of America, Goldman Sachs, and JPMorgan.

According to FactSet, the estimate is that the S&P 500 Index earnings grew by 13.2%, which will make it the sixth consecutive quarter of double-digit earnings growth. In most cases, the index normally reports numbers that are better than estimates, meaning that the real figure will be close to 20%.

Many American companies will publish their results this week, with the most notable ones being General Dynamics, RTX, and Northrop Grumman, which are large players in the Military Industrial Complex. 

The other top names to publish their results this week are Tesla, Lam Research, IBM, Boeing, Caterpillar, American Express, and P&G. In all, hundreds of companies in the S&P 500 Index will publish their numbers this week, which will lead to more volatility in the market.

US retail sales and PMI numbers 

Some major macro numbers will have an impact on the S&P 500 Index this week. The first main one will be the retail sales report, which will come out on Tuesday. Economists expect the data to show that sales dropped in March as the Iran war fueled inflation. 

The average estimate is that the headline retail sales rose 2.4% YoY in March, a substantial slowdown from the previous 3.7%. Sales are expected to grow 1.1% MoM, up from the previous 0.6%.

The US will also release the latest pending home sales report on the same day. Additionally, S&P Global will release the flash manufacturing and services PMI numbers on Thursday, providing more color on how companies performed in April.