Fragile Upside
“Going Nowhere Fast” Is About To Change
The Floor Meets Crash Protection
Fragile Upside
Sell In May…
“Going Nowhere Fast” Is About To Change
This was my framing of the indices every day in my live trading room last week as top line markets digested outsized gains from the prior two weeks. And lo and behold, the market moved from SPX $7126 Friday April 17 close to $7165 Friday April 24 close - a mere 39 point gain.
Last week we had 15% of the S&P report earnings; this week it will be 180 companies or 36%.
Last week we had Intel’s outsized beat, surging 27% afterhours.
I gave clients $57.60 as target for 2026 last year - now $30 above. Congrats patient bulls!! INTC finally took out 2000 highs!
This week we have the AI-lynchpins reporting: Microsoft, Amazon, Google, and Meta - and ALL on Wednesday. (QCOM too - worth noting after Intel’s earnings beat!) And all these earnings of importance SAME DAY AS FED DAY - which will be Powell’s last meeting as Fed Chair.
Given these are the four largest AI spenders of the bunch, their guidance on capital expenditures will be closely watched.
As of now, Hyperscalers’ 2026 capex estimates have been revised up 25% year-to-date - now expected to run ~$680bn, up 63% year-on-year. Any sign of worry - in AI infra spending or supply shocks from the Iran War - would be market moving.
New Fed Chair nominee, Kevin Warsh’s confirmation path was just cleared as Senator Tillis dropped his condition that he would block the Senate hearing until DOJ ended the Powell probe. Tillis prevailed, but that does not mean that Trump won’t attempt to fire Powell in spite - as he is expected to stay on as Fed Governor after his term as Chair ends.
Economic Data For The Week Ahead:
BOJ meets Monday but is not expected to hike. But they will eventually…
Of note: Thursday morning: PCE (core 3.2% YoY, up from 3.0%) matters.
And so does Apple after hours Thursday!
War escalation is the biggest threat to giddy market bulls.
Now, let’s get into where my indicators and quant read sees the biggest risks and opportunities:
