Another thing AAPL talked about on its call is the headwind from a strong dollar, something that’s likely getting harder to ignore for many U.S. companies. The Dollar Index finished Tuesday at about 97.5, a little below last week’s multi-month highs. However, it’s stayed mostly above 96 this year, up from around 90 early last year, and that’s been a drag on results for some multinational firms. At this point, it would probably take more signs of overseas economic strength to put pressure on the greenback, and while some data out of Europe early this week did look promising (see more below), that’s not necessarily a trend.

More strong earnings news in the mix this morning include results from CVS Health Corp (NYSE:CVS), Humana Inc (NYSE:HUM), and Yum! Brands, Inc. (NYSE:YUM). Same-store sales at YUM rose much more than analysts had expected, a good sign from the consumer demand side. Basically, we’ve seen mainly positive results from a wide group of industries since yesterday’s closing bell, and that might give the market an additional tailwind.

As we often see when the meeting holds little sense of urgency, attention might turn more to what Powell says in his press conference afterward. The recent higher-than-expected Q1 gross domestic product (GDP) could be one thing he gets asked about, as the Fed has been forecasting slower growth. Does Powell consider the Q1 number an outlier, with possible slowness potentially pushed into later this year? Or could the Q1 data mean the Fed might have been too pessimistic? We’ll have to wait and see if he addresses this.

Also, there’s been a lot of scuttlebutt lately about chances of the Fed lowering rates. The latest came Tuesday when President Trump urged rate cuts. Don’t be too surprised if someone at the press conference directly asks Powell if he and the Fed plan to cut rates and when, but also don’t be surprised if Powell doesn’t offer a direct answer. The Fed has been sticking to its guns for a while now saying it will focus on data, and it seems unlikely that’s going to change anytime soon. 

The Communication Services sector got hammered Tuesday, mainly in the wake of disappointing earnings from Alphabet Inc (NASDAQ:GOOG). It’s unclear, analysts said, exactly what led to the company’s slowing advertising growth in Q1, but it might simply be a matter of more competition. Some analysts also worry about the company’s spending trends. Whatever the case, GOOG had its worst trading day in six years.

Figure 1: AAPL JOLT: Shares of Apple got a big lift right after the close when the company reported earnings late Tuesday, as this one-day chart demonstrates. At its highs in post-market trading, the stock reached levels not seen since early November. Data Source: Nasdaq. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.  

Four in a Row: April marked the fourth-consecutive month of gains for the S&P 500 Index (SPX) following December’s 9% decline. In fact, only two of the last 12 months (October and December) actually saw losses in the SPX, despite that nagging feeling you might have that the entire Q4 was a disaster. Stocks actually rose slightly in November between their October and December collapses. Now the market is roughly back to where it was at the end of last September, so those Q4 losses might feel long ago. People tend to emphasize the strong performance of cyclical stocks since the start of 2019, but looking back to the end of last summer’s rally, Utilities has actually been the top-performing sector, adding on 9% to the level it was at in late September when the SPX last reached these highs. The two follow-up sectors since then are Communication Services and Real Estate.

What Inversion?: Speaking of long ago, it seems like a lot of time has passed since late March, when many analysts were warning about how the Treasury yield inversion might point toward economic weakness ahead. Since then, longer-term yields have gained some traction vs. short-term ones, often a sign of economic growth. Early this week, 10-year yields widened their lead over two-year yields to more than 20 basis points. That’s relatively low historically, but compared to a single-digit gap earlier this year, it seems like a lot.

The three-month yield, which had run up a slight lead over the 10-year at one point, now trails the 10-year by 7 basis points. That said, 10-year yields remain historically low at 2.5%, which is kind of a dichotomy when you consider that stocks are at all-time highs. High stock prices can often be accompanied by losses in the bond market, sending yields higher. This time around, the Fed’s dovish stance might be holding yields back, helped in part by weak economic growth overseas. The latest inflation data didn’t appear to give any new ammunition to anyone looking for a pullback in bonds, and might also look supportive for dividend-paying sectors that often compete with the bond market to draw in yield-seeking investors.

Foreign Affairs: We haven’t seen a lot of evidence of global growth concerns crop up in corporate earnings, and CEOs have set a positive overall tone about the global economy. In some cases, their international businesses seem to be thriving despite recent slower growth in Europe and China, These firms include Starbucks Corporation (NASDAQ:SBUX), United Technologies Corporation (NYSE:UTX), and United Parcel Services, Inc. (NYSE:UPS). Some other companies with major foreign footprints, including Microsoft Corporation (NASDAQ:MSFT) and Facebook Inc (NASDAQ:FB), showed no signs of foreign weakness hurting their growth, MarketWatch noted. 

That said a couple of major U.S. firms, namely Caterpillar Inc (NYSE:CAT) and 3M Co (NYSE:MMM), have reported softness in their international results this earnings season. Both of those companies cited weakness in Asia-Pacific, with MMM specifically mentioning China. Also, AAPL talked about strong dollar headwinds, as mentioned above.