It sounds like a broken record, but the good earnings continue.

This time, it’s Nvidia (NASDAQ:) and Best Buy (NYSE:). Both companies’ results surpassed analysts’ average expectations, and BBY appeared to get some traction in pre-market trading. NVDA shares struggled a bit ahead of the open and only made slight gains despite a new sales record, but that could be, in part, because they rallied pretty heavily into earnings.

There’s still a few earnings stragglers ahead, but we’re basically through with the Q1 earnings season. Which gives us about a six-week break until mid-July, when Q2 numbers start rolling in.

Checking other items, is down, but the ticked up a few points this morning back above 1.6%, which could be a sign of investors getting more positive around the economic picture.

Maybe they’re onto something. Weekly fell to 406,000, a new pandemic low that was way under the average Wall Street estimate of 425,000. This is the third week in a row below 500,000, but major indices didn’t seem to get much of a lift from the data.

The U.S. market isn’t getting much direction from overseas this morning, where Asian and European markets were a pretty mixed affair. One question as the U.S. session begins is whether the strength in “reopening” and tech stocks will continue into the new day, especially with the —where many big tech stocks make their home—under pressure early on. Another is whether the can find a way to claw past 4200, a point it’s struggled to close above recently. A solid move above that level would probably be seen as technically bullish.

Meanwhile, volume continues to grow in the so-called “meme” stocks GameStop (NYSE:) and AMC Entertainment (NYSE:) as people look for a compelling story to trade. But just because you see volume grow doesn’t mean people aren’t playing with both hands. They’re pretty even in terms of buying and selling. Often you hear the narrative that it’s just retail traders, but that’s not the case. The heavy volume suggests there’s a lot of big firms in there, also. Anyone considering trading these should be aware of how volatile they can be, and go in prepared to be disciplined about levels where they want to get in and get out.

Getting Small

The large-cap indices struggled to gain ground yesterday, but quietly the Index of small caps posted its best close since May 6. Strength in financials and consumer discretionary, both of which are heavily represented in the RUT, appeared to help that index achieve nearly 2% gains.

Some of this reflected impressive retail earnings. Urban Outfitters (NASDAQ:), Dick’s Sporting Goods (NYSE:) and Abercrombie & Fitch (NYSE:) all saw their shares soar after reporting this week. While some of the retailers benefited during COVID from stay-at-home online shopping, it looks like some of the latest results reflected more of a “going back out” mentality, especially when you consider what DKS said about kids returning to sports and needing new apparel for those activities.

Cruise lines were another reopening area getting some traction Wednesday. News reports that Norwegian Cruise Line (NYSE:) plans to deploy eight new ships and that Carnival (NYSE:) (NYSE:) plans to start sailing out of parts of Florida maybe as soon as next month helped push those shares into green territory.

Communication services had a good Wednesday, but tech appeared to have trouble building on gains from earlier this week, losing a little ground yesterday. That might have been one factor that helped prevent the SPX from making much headway toward the 4200 mark. It’s closed just under that key technical resistance area several days in a row despite moving above it intraday. Remember that tech includes many of the heaviest-weighted SPX companies, so any stall there can drag the index (see more below).

The bond market isn’t making any big waves that you might think could scare any tech investors, the way it did back in February. The 10-year yield looks like it’s in a pretty tame area, staying below 1.6% on Wednesday. Volatility also remains out for lunch, with the Cboe Volatility Index () scooting below 18. It’s down pretty sharply from a week ago when it briefly topped 25.

Let’s Talk Deals And EVs

In the latest deal, Amazon (NASDAQ:) is buying MGM Studios for nearly $8.5 billion. This can arguably be seen not just as a battle for the streaming market, but it’s also a battle for AMZN to try to be more a part of everyones’ life. Apple (NASDAQ:) is already there in a big way, with so many of us checking our phones regularly (an average of 96 times a day, according to a 2019 survey by privately-held tech care company Asurion).

AMZN isn’t big into the phone game, but it’s already a huge part of many peoples’ everyday activities when it comes to shopping for goods, food and entertainment. Both AAPL and AMZN are also involved in the push for self-driving cars, media reports say. Basically, these companies want to be the service you turn to in every aspect of life.

Speaking of cars, two of the best performing large-cap stocks so far this year are General Motors (NYSE:) and Ford (NYSE:), both of whom are embracing electric autos. They’re also both huge distributors, so there’s an amazing opportunity if they get things right.

Many people love Teslas (NASDAQ:) and there’s something about CEO Elon Musk that’s kind of like the late AAPL CEO Steve Jobs in that a lot of investors want to be involved in how he sees the world, but F and GM can distribute in a big way. The question is what happens to Nio (NYSE:) and other smaller electric car companies if the legacy big boys start to make headway in this area.

Who Needs Your Help, Anyway?

The SPX is up a solid 11.7% year to date heading into the final days before Memorial Day. Now we’re nearly five months through 2021, it’s worth checking what plays into that.

An 11.7% gain in five months is nothing to sniff at, but some investors may be frustrated at the lack of progress since mid-April. If you feel that way, it may be helpful to look beyond the headline SPX number. Things could appear better than you think.

Consider this: The following six stocks—AAPL, Microsoft (NASDAQ:), AMZN, Alphabet (NASDAQ:), Facebook (NASDAQ:), and TSLA—combine for a market capitalization of around $8.5 trillion. That’s roughly one-quarter of the SPX’s total market cap, and the SPX is a weighted index, meaning the big gorillas have more of an influence on its ups and downs than smaller stocks.

For a few years leading into COVID, and in 2020 following the first wave of the pandemic, the argument against getting too excited about SPX gains was that much of the surge reflected strength in those six stocks. The rest of the SPX just sort of muddled along a lot of the time, carried higher by the so-called “mega-caps.” It was a “tail wagging the dog” story, so to speak.

So far this year, it’s been more “share the wealth,” meaning many of the less humongous stocks in the SPX are driving overall gains despite lack of zip from most of those six. Some of the mega-caps are doing great in 2021, with FB up 20% and GOOGL up 36% as of midday Thursday. The other four, however, aren’t anything to really write home about as far as year-to-date performance.

MSFT is up slightly more than the SPX at 13%. But the other three (AAPL, TSLA and AMZN) trail far behind. AAPL and TSLA are both actually down this year, with losses of 12% for TSLA and 4% for AAPL. Meanwhile, AMZN is roughly flat.

So the bad news is, it’s harder for investors to do well just by investing in those mega-caps and riding the wave, at least the last few months. The good news is, more of the broader index is doing better, which may reflect the trend toward “value” sectors like Energy and Financials, as well as reopening sectors like Consumer Discretionary, Industrials, and Materials.

Some of the major stocks outside those six that are outperforming the overall SPX so far this year and helping drive its strength include Ford (F), up 57%, General Motors (GM), up 45%, Exxon Mobil (NYSE:), up 41%, Bank of America (NYSE:), up 38%, Nvidia (NVDA), up 20%, Home Depot (NYSE:), up 19%, Eli Lilly (NYSE:), up 18%, UnitedHealth (NYSE:), up 17%, and 3M (NYSE:), up 15%. Two huge names up there with the so-called mega-caps by market capitalization and also outpacing the SPX include JPMorgan Chase (NYSE:) and Berkshire Hathaway (NYSE:). That’s a wide array of contributors from across multiple sectors besides the tech and communication services that the big six call home.

For a long time, the question was whether the broader market could do OK without so much help from the AAPLs and TSLAs of the world. The answer, so far in 2021 at least, appears to be a firm yes. For investors as the summer looms and we get toward the halfway point of the year, this means it’s even more important to do your research and look beyond the so-called “FAANGs” and their cousins like TSLA and MSFT. Maybe that’s something to chew on besides hot dogs and corn on the cob over the long weekend.

Q2 Earnings Projections In Focus: Something to keep in mind when you look at analysts’ Q2 earnings projections is that in the past, they’ve often tended to be on the low side. For instance, initial estimates for Q1 earnings growth were almost all below 30%, and the near-final tally with 96% of companies reporting is nearly 52%, according to Factset. Having said that, Wall Street researchers appear to be gearing up for pretty impressive Q2 earnings growth, with Factset reporting that analysts project nearly 60% earnings growth and 19% revenue growth. Keep in mind that easy comparisons to last year (when COVID was raging) give companies a built-in advantage. What might matter more is what executives say about Q3 and Q4, when comparisons get tougher.

Another Earnings Wild Card: Inflation is starting to affect many companies, as we heard on some Q1 earnings calls, and it’s unclear how they might respond. Will they pass along the costs to consumers, or will they be willing to put up with some margin deterioration if they decide to eat the higher input costs? If inflation does prove to be more than “transitory,” as the Fed describes it, the big question for the second half of the year could be how companies decide to address rising prices. These are questions that might get answered starting on some of the Q2 earnings calls.

If you wonder how transitory these price increases actually are, consider keeping track of some product categories that helped drive consumer price index (CPI) growth in April. For instance, there was a huge jump in used car prices that month. Will this show up again in the May CPI report? Or was it just a one-month event driven by supply chain issues? We’ll likely know more on June 10 when the May CPI numbers come out.

Inflation Indicator Up Next: The April : The Fed has said it watches this one closely, especially the core figure that extracts volatile food and energy costs. rose a modest 0.4% back in March, but that was before April brought a surprisingly hot core consumer price index (CPI) reading of 0.9%, the largest monthly increase since April 1982.

Much of that rise in April reflected a surge in used car prices, not exactly an item you go out and buy each day. That could be one reason why the market’s reaction (at least judging from Treasury yields) hasn’t been incredibly dramatic. Yields are actually down since the CPI report. There are a bunch of differences between and PCE prices that are too detailed to explain here, so a strong CPI doesn’t necessarily mean a strong PCE. Having said that, analysts expect core PCE prices to be up 0.6% in April, according to research firm Even if the gain is above that, it’s unclear if the market will react much, maybe in part because it’s already digested the CPI data. A lower than expected PCE, on the other hand, might ease some inflation fears.

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