/ April 27 / Weekly Preview
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Monday:
N/A
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Tuesday:
ADP Employment Change Weekly
CB Consumer Confidence (89.5 exp.)
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Wednesday:
Building Permits Prel (1.39M exp.)
Durable Goods Orders MoM (0.5% exp.)
Housing Starts (1.4M exp.)
Fed Interest Rate Decision (hold expected)
Fed Press Conference
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Thursday:
EU GDP Growth Rate YoY (0.8% exp.)
EU Inflation Rate YoY (2.9% exp.)
US GDP Growth Rate QoQ (2.1% exp.)
Personal Income / Spending
Initial Jobless Claims (215K exp.)
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Friday:
ISM Manufacturing PMI (53.2 exp.)
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Monday:
Verizon Communications Inc.
Cadence Design Systems, Inc.
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Tuesday:
Coca-Cola Company (The)
T-Mobile US, Inc.
Corning Incorporated
Booking Holdings Inc.
Seagate Technology Holdings PLC
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Wednesday:
Alphabet Inc.
Microsoft Corporation
Amazon.com, Inc.
Meta Platforms, Inc.
KLA Corporation
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Thursday:
Apple Inc.
Eli Lilly and Company
Mastercard Incorporated
Caterpillar, Inc.
Merck & Company, Inc.
Sandisk Corporation
Western Digital Corporation
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Friday:
Berkshire Hathaway Inc.
Exxon Mobil Corporation
Chevron Corporation
Colgate-Palmolive Company
Make or Break Time
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Last week, our concluding observation was that equity markets were primed for a correction following one of the sharpest rallies since May 2025. Corrections can happen in one of two ways: either a price pullback or sideways consolidation. We got the latter.
Broadly speaking, the market churned in a relatively tight range, with SPY not moving more than ±1% from Monday’s open to Friday’s close. An all-time-high was established on Friday, lending support to the bullish case. This kind of narrow consolidation at high prices following an explosive rally is technically constructive, as it shows investors are not in a hurry to take quick profits.
SPY’s 20-day rolling returns (now at +11%) have climbed near historical records that reversed significant losses, exceeding a +1.5 Standard Deviation band. Only the post-Covid and the post tariffs rallies have been meaningfully more pronounced. The good news is that following such rallies, the market tends to do exceedingly well on a time horizon that exceeds 3 months.
Iran was the week’s dominant theme again, as drama from the Middle East moved markets with every headline. The nuance was different this time around compared to previous weeks. The original two-week ceasefire was set to expire Tuesday and a clash between the U.S. Navy and an Iranian container ship sparked a sell-off, with the S&P 500 declining -0.63% and oil surging to $97.
Then, Trump extended the ceasefire indefinitely, awaiting a proposal from a “seriously fractured” Iranian government. Markets bounced on Wednesday as oil retreated below $90. Thursday brought a decline only for a rally to take place on Friday as indices notched all-time-highs. Plenty of volatility to speak of and quite hard to actively trade.
Also moving the tape was Kevin Warsh’s confirmation hearing before the Senate Banking Committee for Fed Chair. He acknowledged the need for an independent Federal Reserve and said he would not allow Trump to influence rate decisions. Mohamed El-Erian assessed his testimony as “very well balanced.” Markets liked his tone and responded by diminishing rate hike odds.
Earnings have been the main fundamental driver for equities. 86 S&P 500 companies have reported so far and the beat rate is substantial. EPS is roughly +26% above last year’s level on +10% revenue growth. This is enough to fully rewire the macro narrative and counterweight the inflation and geopolitical risk.
Highlights of the week were as follows:
GE Vernova jumped 13.75% after a standout quarter featuring a $13 billion sequential increase in backlog. The company moved its $200 billion backlog target up to 2027 from 2028 and raised full-year guidance across all key metrics.
Boeing rose over 5% following a smaller-than-expected quarterly loss and signs of improving aircraft delivery performance.
Citigroup posted a 42% increase in net income, with Markets revenue topping $7 billion.
Tesla exceeded expectations on margins and cash flow, and the stock absorbed the results positively (all things considered).
Analysts have been revising estimates higher. Goldman Sachs added +4% to their 2026 S&P 500 EPS target. The sectors enjoying the most upward revision pressure include Energy, Technology, Basic Materials, and Utilities.
One of two things are required for a breakout at this juncture: either a positive resolution to the Hormuz Strait situation, or continued earning beats that push FY EPS estimates high enough to justify current valuations.
Speaking of which, the market’s median price / sales multiple now sits at 3.26, at the historical upper band limit, but well below the recent peak recorded in January (and far below 2022). This is not cheap by any means, but may become defensible if earnings continue growing at double digit pace. From a valuation standpoint, the bull case is now stronger than it was at the start of the year.
However, that doesn’t mean a pullback is not the base case from a short term technical perspective. The S&P 500 closed Friday at a fresh all-time high of 7,165, up 0.80% on Friday’s session and extending the index’s V-shaped run off the March lows. However, reports over the weekend are anything but reassuring. President Trump survived yet another assassination attempt, WTI oil is still trading at $95 and analysts warned that prices may increase “non-linearly” as physical supply gets strangled.
While technicals remain clearly bullish, we are trading in highly overbought territory. Both the 50 and the 200-DMA are now sloping upward, breadth figures have improved but need strengthening if the rally is to continue. Our Buying Regime has flipped positive last week and the Enterprise strategy (our main asset allocation model) is overweight stocks.
The chart for SPY presented below is not adjusted for a fundamental price target or EPS growth — it is the raw result of our analysis system. It shows support at $699 (M-Trend), with upside to $734 (R1) and downside to the 50-DMA ($675). Using this configuration, SPY does not appear as overbought in the longer term as one would think.
If corporate results are the fundamental underpinning of this rally, the fragility comes from Main Street. Notably, the Michigan consumer sentiment printed its lowest reading on record. 2025 Q4 GDP growth was revised down to just +0.5% annualized. Consumer Confidence has been deteriorating sharply, with the Expectations component flirting with the sub-80 recession threshold. Clearly not all is well in the economy, with or without an inflation shock.
The latest data from the options market shows how the balance of risk versus reward has started skewing toward risk as the rally unfolded.
For now, the market is climbing a “wall of worry” and technicals are strong. However, it’s not an understatement to say that this week is probably the most consequential one of the year. Events unfolding over the next 5 trading sessions have potential to serve up large amounts of volatility, with multiple events that could spark a ±2-3% move on any given day.
We’ll get the FOMC decision, the Q1 GDP advance estimate, and earnings from five Magnificent 7 companies (Meta, Microsoft, Alphabet, Amazon, and Apple) — all packed into one window that could set the market’s direction for the entire summer.
Rates are expected to stay on hold at 3.50–3.75%. It’s a statement-only meeting, so Powell’s press conference carries the weight. Markets will watch closely for any shift in tone — especially whether the Fed acknowledges faster labor-market deterioration or stays inflation-first. Words like “patient” on cuts could delay expectations until September or later.
Consumer Confidence data lands right before the FOMC announcement and Powell’s press conference. Meta reports after the close on Wednesday — the first big read on digital ad spending resilience and massive AI capex plans. Microsoft, Alphabet, and Amazon also report after the close, with investors gauging whether enterprise AI spend is actually converting into revenue.
On Thursday, the Q1 GDP print arrives at 8:30 AM with recent nowcasts ranging widely from 1.2% (GDPNow) to 2.3% (NY Fed). Apple’s earnings follow after the close, with with iPhone 17 cycle data, China tariff exposure, and the Tim Cook-to-John Ternus CEO transition all in play.
As if that wasn’t enough, the Euro area will also get major data releases regarding inflation, GDP Growth and the ECB’s interest rate decision, which may also influence the global risk outlook.
Our Trading Strategy (Sigma Portfolio)
Basically, a ton of data is about to hit the tape. We carry a significant cash position (around 20%) going into the week, with the expectation that a 2-3% pullback can occur on any given day, for a variety of reasons.
With Energy correcting from highly overbought levels and every other sector gaining commensurately, rebalancing flows should favor value over growth.
As shown in the intro, the scope for near term gains is limited. The longer term outlook is favorable, however. Our objective is to deploy our cash position on a pullback which does not violate support and rebalance risks in the Sigma Portfolio away from recent winners. While no outright sell signal has been triggered just yet, we cannot ignore the risk of a technical retracement, even on positive developments (sell the news).
We'll monitor tomorrow’s rebalancing session for the Enterprise Strategy and notify you of any portfolio changes via Trade Alerts.
Disclosures / Disclaimers: This is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this blog post. I currently do not own or plan to own any position, long or short, in the securities mentioned.
I am not a financial advisor licensed in the United States. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject to change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this blog post.
I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter. Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.
I wrote this blog post myself, and it expresses my own opinions. I do not have a business relationship with any company whose stock is mentioned in this blog post. The information in this blog post is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
The primary purpose of this blog post is to share industry expertise and research and receive feedback (confirmation / refutation) regarding my investment theses.