Stocks closed out last week with a low volatility session on Friday as investors saw little reason to reposition portfolios in response to the domestic economic data and Janet Yellen’s speech on the economy. The consumer price index was the key report on Friday which showed that inflationary pressures came in at -0.20% on a year over year basis in April. Janet Yellen’s press conference on the economy contained no major surprises. The Fed Chair reiterated the central bank’s plans to raise rates this year while acknowledging the economic data has been soft as of late.

The S&P 500 traded in an extremely narrow range on Friday ahead of the holiday weekend. Sellers emerged in the final hour to push markets to their lows of the day. The S&P 500 finished the session with a loss of -0.22% to close at 2126.06. Trading volume was extremely low on Friday. The advance/decline margin showed that almost two stocks declined for each share that finished in positive territory. New highs decreased slightly while the number of individual stocks recording new 52 week lows continues to slowly increase.

The lone S&P 500 subsector to finish in positive territory on Friday was the financial sector. No individual sector saw a price decline in excess of -0.50% but the industrial and consumer discretionary sectors recorded the worst performance. Commodities declined across the board on Friday thanks to some renewed strength in the dollar index. A strengthening dollar generally puts pressure on commodities. Bonds were unchanged on Friday as we hardly saw any fluctuation in interest rates.

First quarter earnings season came to an end last week following Wal-Mart Stores, Inc. (NYSE:WMT) report on Tuesday. While the overall numbers were nothing to write home about, they were significantly better than expectations heading into first quarter earnings season. To recap, coming into earnings season analysts were expecting an extremely weak quarter and were forecasting a year over year drop in aggregate earnings of about -4.7%. Throughout the course of the reporting period, the numbers progressively improved as companies were able to exceed the extremely low forecasts.

According to FactSet, 71% of S&P 500 companies reported earnings that exceeded estimates while only 45% reported revenues above consensus forecasts. On the whole, the total earnings growth rate for the S&P 500 was 0.30%. The healthcare and financial sectors reported the best earnings growth rates for the quarter. The energy sector reported the largest year over year decrease as a result of the significant drop in crude oil prices. This quarter marks the lowest year over year earnings growth rate since the third quarter of 2012. The overall earnings beat rate was about average, but the revenue beat rate was significantly lower than normal. The total revenue decline for S&P 500 companies in the first quarter came in at -2.9%.

This is largely due to the dollar’s big gain in the first quarter which had a negative impact on revenues. This was the largest year over year decline in revenues since the third quarter of 2009 when revenues declined – 11.5%. Looking at future quarters, analysts are actually expecting the year over year declines in earnings and revenue to continue through the third quarter of 2015. While analysts are still projecting positive earnings growth for the full year, mostly thanks to record level projections for the fourth quarter, the stagnating earnings picture should be watched closely as earnings drive stocks in the long term.

Overnight action in Asia and Europe was mixed. However, it is important to note that the dollar is significantly higher versus both the Yen and the Euro this morning. The strong dollar environment is putting pressure on commodities and the magnitude of the move is likely weighing on equity markets this morning. Durable goods orders were released this morning. The headline data registered a decline of -0.50% but core capital goods, which are a good proxy for business investment managed to climb by 1.00%. This is the second consecutive month we’ve seen core capital goods increase but it has not translated into any strength in durable goods orders.

The Case-Shiller Home Price Index was also reported this morning. This proxy showed that home prices rose 0.95% over the course of the past month and 5.04% on a year over year basis. This was slightly better than expectations and shows that housing gains continue to chug along. While yea rover year gains are slightly outpacing wage growth, the pattern of consistent gains is a positive element. With earnings now firmly in the rear view mirror, markets will look to domestic economic data and signs from the Fed for future direction.