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Markets Flip Higher Late Session; Q1 Reports from CAR, NXPI & More

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Market indices rallied into the close to start a fresh week of trading, continuing with the historic volatility along the way. Reaching session lows as the final hour approached — the Dow was -527 points at its low, while Nasdaq touched a low not seen since November 2020 — but once it did, the turnaround was swift and decisive. The Dow finished +0.26%, the S&P 500 was +0.57%, the Nasdaq +1.63% (+201 points) and the Small-cap Russell 2000 reached +0.93%.

We’re not seeing cycle peaks in volatility — those came in early March, ahead of the most recent Fed meeting on monetary policy — but it sure feels like it. After nestling down to sub-20 levels early last month, the VIX shot back north of 30 again, for the fourth time in the past five sessions. During Friday afternoon’s big sell-off, the VIX climbed back to the mid-30s and has stayed there. Plenty of uncertainty ahead of another Fed meeting.

Also, the 10-year bond yield crossed 3% for the first time since December 2018 today. It closed the session off this peak, but it’s clear bonds are already pricing in Fed hikes in real time. Although remaining within 25 basis points of inverting a second time in the past few weeks, we’re seeing the 10-year — which had been sub-1.2% as recently as last summer — really taking off ahead of this week’s Fed meeting.

In Q1 earnings, Zacks Rank #2 (Buy)-rated Avis Budget (CAR - Free Report) crushed estimates after the closing bell: earnings of $9.99 per share more than doubled the $3.54 expected and is in another stratosphere from the -46 cents per share reported in the year-ago quarter. Revenues of $2.43 billion also easily surpassed the $2.18 billion expected in the Zacks consensus. Shares rose +12% on the news initially, and have remained above +8% in late-day trading.

Netherlands-based semiconductor maker NXP Semi (NXPI - Free Report) also beat and raised on its Q1 earnings report Monday afternoon. This has set off a volatile after-market session where results have mostly been favorable; the semi company, like most semi companies, have been taking a bath year to date, -23%. But the company asserted demand from end-markets remains very strong.

Clorox (CLX - Free Report) and MGM Resorts (MGM - Free Report) also beat earnings expectations this afternoon, with one company selling the news and the other climbing in the late session. Expedia (EXPE - Free Report) is also up in after-market trading following a Gross Bookings number up +58% year over year.

It’s a heavy week for Q1 earnings, the most voluminous of the entire season, in fact. Between this tonnage of reporting and the Fed’s next move — to say nothing of the new jobs reports coming out — by the end of this week we should have a clear picture of Q1 and the near-term road ahead.

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