Wall Street’s scorching rally off its wartime lows back to new highs is heading into a fresh test this week, with investors waiting to see what the Iran war meant for businesses and economic activity over the past six-plus weeks. The market’s rebound has been powered in large part by technology and large-cap growth names, while the people living through the consequences of war, layoffs, and price pressure remain background noise to the trading screens.
Who Gets Counted, Who Gets Hit
Stocks held up better than expected during the Iran war sell-off, which bottomed on March 30, because investors were betting that many companies could still grow earnings this year. That wager is now being stress-tested by a jam-packed earnings calendar that includes Capital One Financial, Boeing, GE Vernova, Honeywell, Dover, Procter & Gamble, UnitedHealth Group, United Airlines, Intel, Tesla, ServiceNow, IBM, Lam Research, Texas Instruments, and others. The market is looking for insight into what the war did to businesses and economic activity, but the frame remains the same: corporate balance sheets first, everyone else later.
So far, the reporting period has been strong, with about 86% of the roughly 50 companies that have reported quarterly numbers posting better-than-expected earnings, according to FactSet. That is the language of the apparatus: “better-than-expected” for shareholders, while the costs of instability are absorbed elsewhere. CNBC said the market backdrop remains mixed, with geopolitical risk and policy debates weighing on sentiment, while investors anticipate a heavy earnings week featuring Tesla and Boeing.
The Market’s Favorite Story
Since the S&P 500 bottomed on March 30, technology has moved from the worst-performing sector to the best-performing sector, helping drive the rebound. Bloomberg described Big Tech’s rebound as a $4 trillion boomerang powering the S&P 500 to new heights. Reuters said there was a revival of the “TINA” mindset, with “TIARA” trades reflecting allocations favoring U.S. equities and technology. In plain terms, capital is chasing the same concentrated winners again, because the system rewards concentration and calls it resilience.
Major investment banks have upgraded U.S. equities to overweight from neutral in recent days, citing resilient corporate earnings, particularly in technology. CNBC said the market backdrop remains mixed, with geopolitical risk and policy debates weighing on sentiment, while investors anticipate a heavy earnings week featuring Tesla and Boeing. CNBC also said the one thing that should matter most this week is the six Club names reporting.
What the Calendar Serves Up
The week ahead includes Monday, April 20, with Cleveland-Cliffs before the bell and Alaska Air, Steel Dynamics and Zions Bancorp after the bell; Tuesday, April 21, with the Commerce Department’s Retail Sales Report at 8:30 a.m. ET and the National Association of Realtors’ Pending Home Sales Index at 10 a.m. ET, plus UnitedHealth Group, GE Aerospace, 3M, D.R. Horton, Danaher, Genuine Parts Company, RTX, Synchrony Financial, Atlantic Union Bankshares, Quest Diagnostics, Equifax, Forestar Group, Halliburton, MSCI and Northrop Grumman before the bell, and Capital One Financial, Intuitive Surgical, EQT Corporation, Interactive Brokers Group, United Airlines, W.R. Berkley and Chubb after the bell.
Wednesday, April 22, brings Boeing, GE Vernova, Vertiv Holdings, AT&T, Elevance Health, Boston Scientific, Philip Morris International, BankUnited, First BanCorp, Moody’s, TE Connectivity and Wabtec before the bell, and Tesla, ServiceNow, IBM, Lam Research, Texas Instruments, Hexcel, CSX, Pathward Financial, Century Communities, Kaiser Aluminum, Southwest Airlines, Molina Healthcare, Oceaneering International and United Rentals after the bell. Thursday, April 23, includes Initial Jobless Claims at 8:30 a.m. ET and the Kansas City Fed Manufacturing Index at 10 a.m. ET, plus Honeywell, Dover, Nokia, Blackstone, Dow Chemical, Freeport-McMoRan, American Express, Keurig Dr Pepper, STMicroelectronics, Texas Capital Bancshares, American Airlines Group, Huntington Bancshares, Infosys, Lockheed Martin, Comcast and Cemex before the bell, and Intel and Baker Hughes after the bell. Friday, April 24, has the University of Michigan’s Consumer Sentiment Survey final reading at 10 a.m. ET and Procter & Gamble, Charter Communications, Western Union, Apogee Enterprises, First Hawaiian, Flagstar Financial, Gentex, HCA Healthcare, Norfolk Southern, SLB and Sensient Technologies before the bell.
CNBC said Tesla and Boeing are among the 88 S&P 500 companies scheduled to post results. It said the reporting period has been strong and that the market will look to these earnings reports for insight into the Iran war’s effect on businesses and the economy. CNBC also said investors want to understand the outlook from here. Reuters said the revival of TINA and TIARA reflects allocations favoring U.S. equities and technology. The names change, the hierarchy doesn’t: the market keeps asking which corporations can keep extracting value while the rest of society absorbs the shock.