The markets started the first two days relatively flat. The S&P 500 ETF (SPY ) has traded in a small range and has managed to only decline by 0.47%. This is largely in part due to the Fed announcement that will come out Wednesday at 2pm EST. Usually the markets tend to quiet down as traders do not wish to take risk ahead of an event where the outcome is unknown.
The same cannot be said for the Nasdaq 100 (QQQ ). Showing relative weakness all week, it was finally clobbered on Wednesday as Apple (AAPL ) sold off 8% after reporting earnings. Twitter (TWTR ) also reported earnings and sold off over 13%. This has created a little disconnect between the usually correlated SPY and QQQ. The volatility isn't over for the Nasdaq either. Amazon (AMZN ) is due to report on Thursday after the close.
Other tech related sector ETF's have struggled as well. The Select Sector SPDR Tech ETF (XLK ) has suffered a 2.35% decline already this week, and with the negative response from AAPL's earnings this decline is just getting started. Year to date it's still positive, but not by much (1.47%).
Most of the other sector ETF's we report on have also been calm with the exception of a few.:
The Solar ETF (TAN ) continues to climb off its 52 week lows. In the past month TAN has managed to sneak out a 10% rally with little media attention. Although its still down over 20% for the year, short term traders have most certainly bid this one up though April.
Lastly, biotech has suffered this week as well. The volatile sector has seen some bad news from companies like Sarepta Theraputics (SRPT ) which fell 36% Tuesday. Because of this the Biotech Sector ETF (IBB ) lost 1.5% Tuesday and is now down on the week. The biotech sector has also under performed the broad markets this year with a loss of 16.78%.
Wednesday comes the FOMC announcement and rate decision. Pair that with some notable earnings announcements, and you have a recipe for heightened volatility for the duration of the week.