Focus on earnings and inflation

Several central banks will announce their policy rates this week. The U.S. Federal Reserve and the Bank of Canada will announce theirs on Wednesday, April 29, and the European Central Bank (ECB) and the Bank of England will announce theirs on Thursday, April 30. Although no policy rate changes are expected from the Federal Reserve this time, forward guidance will be important. 

Stock markets are eager to see indications from the Fed of a potential rate cut later this year. Expectations for such guidance have increased since Kevin Warsh was nominated to succeed Jerome Powell as Federal Reserve chairman from 15 May, pending Senate approval. Many believe that Warsh will accommodate President Trump's desire for lower interest rates, which could lead to further gains in the stock market.

It's worth noting that the Brent oil price has increased by over 40 percent since the start of the conflict between the U.S., Israel, and Iran began on February 28. Price increases in energy and fuel, which can have a ripple effect on other sectors and risk driving up inflation and market interest rates. To curb the increase in consumer oil prices, countries have released some of their strategic oil reserves. However, this is only a temporary solution, lasting a few months. Additionally, it will take considerable time for the Gulf region to recover and repair damaged energy infrastructure.

Employment in the U.S., the Fed's primary focus, saw an unusually strong increase in March, with 178 000 new jobs added after two months of no job growth in January and February. This increase was primarily driven by the healthcare and construction sectors. Otherwise, weak U.S. employment growth would be the strongest argument for the Federal Reserve to lower its policy rate in 2026.

The biggest long-term concern for financial markets regarding U.S. interest rates, however, is the growing national debt, a concern that existed even before the war with Iran began. Although he won't admit it, President Trump has a strong incentive to reach a peace agreement with Iran. The United States cannot afford to wage war for very long due to the high cost of launching nearly 1000 Tomahawk missiles and over 1200 Patriot air defense missiles in the first weeks of war.

As of Friday, 24 April, 28 percent of all S&P 500® companies had reported their first-quarter 2026 results. According to Earnings Insight, 84 percent of these companies reported positive earnings surprises and 81 percent reported positive revenue surprises. As the graph below shows, the Industrials sector had the largest average positive earnings surprise in the first quarter of 2026.

As of Friday, April 24, 47 OMX companies had reported their first-quarter 2026 results. Of these companies, 64 percent exceeded earnings expectations , though only 43 percent exceeded expectations. This is a better-than-average outcome compared to historical quarterly results of OMX companies.

On Wednesday, April 29, interim reports from several major companies listed on the Stockholm Stock Exchange, including: SEB, Swedbank, Volvo Cars, NCC, Thule, AstraZeneca, Epiroc, and Peab are expected. Other Nordics companies reporting interim results include Gjensidige Forsikring, Norsk Hydro, and Storebrand in Norway; Kesko, Fortum, Huhtamäki, Kone, Konecranes, and UPM in Finland; and Carlsberg and DSV in Denmark. Additional European companies reporting include Deutsche Bank, GlaxoSmithKline, Mercedes-Benz, and UBS. In the US, AbbVie, Alphabet, Amazon, Biogen, Meta Platforms, Microsoft and Qualcomm will report. Turning to macroeconomic news, Sweden will publish a GDP indicator for the first quarter and the Swedish Institute of Economic Research will publish a business sentiment barometer. Spain and Germany will publish consumer price indices in April. From the Eurozone, a business sentiment barometer for April will be released. The U.S. will contribute housing construction data, durable goods orders, and the trade balance, all for March; as well as weekly oil inventories from the Department of Energy; and an interest rate announcement from the Federal Reserve. 

On Thursday, April 30, interim reports from Aker Solutions, Elkem, and TGS in Norway, as well as from Danske Bank. In the rest of Europe are expected. Quarterly results from Air France-KLM, Drägerwerk, and Volkswagen will also be rleased. In the US, Amgen, Apple, Bristol-Myers Squibb, Caterpillar, Eli Lilly, Mastercard, Merck and Parker Hannifin are scheduled to report. The Swedish company Hexagon is organizing a capital markets day. Macroeconomic news begins with Japan's March industrial production and China's April purchasing managers' index. In Europe, France's Q1 GDP and consumer price index will be released in April, as well as Germany's Q1 GDP, retail trade, and import prices in March. Spain and Italy will report their Q1 GDP, and Italy will report its consumer price index in April. The Eurozone will release the consumer price index in April. There will also be interest rate announcements from the ECB and the Bank of England. The U.S. will contribute its Q1 GDP, personal consumption and inflation (PCE) data from March, and weekly jobless claims and the Chicago Purchasing Managers' Index for April.

On Friday, May 1, interim reports from Schouw & Co. in Denmark and from Chevron, Exxon Mobil, and Moderna in the U.S will be released. May 1 is a public holiday in many countries, including those in most of Europe, Brazil, South Africa, and China. Therefore, several stock exchanges will be closed that day. In terms of macro news, Friday will be dominated by the April manufacturing purchasing managers' index from Japan, the United Kingdom, and the United States.

Last week, the extension of the US–Iran ceasefire triggered a move towards riskier assets, and the S&P 500® reached another all-time high on Monday 27 April, driven by momentum from the earnings season and strength in the mega-cap tech sector. However, RSI is approaching overbought territory and momentum is waning. Breaking below the EMA9, which is currently at 7093, could open the door to the 6990 area. Below that, the next level to watch on the downside is MA20.

Momentum in AI and semiconductors, with Nvidia reaching new all-time highs, fuelled the tech-heavy NASDAQ-100 Index®. However, RSI is back at overbought levels, and momentum appears to be waning, as evidenced by the declining MACD histogram. Breaking below the EMA9 level, currently at 26 738, would open up 26 160 as the next level to watch.

Meanwhile, the DAX®in Germany is holding steady at a cluster of support levels. Breaking below the 20-day moving average (MA20), which is currently at 23 814, would expose the 23 365 level. However, if optimism about resolving the conflict between the US, Israel, and Iran, then a long DAX/short S&P 500® spread could be a more effective risk-adjusted strategy.

EMA 9: 9-day exponential moving average

Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence in which each successive number is the sum of the two previous numbers.

MA20: 20-day moving average

MA50: 50-day moving average

MA100: 100-day moving average

MA200: 200-day moving average

MACD: Moving average convergence/divergence

This information is the sole responsibility of the guest author and does not necessarily represent the opinion of Bank Vontobel AG or any other company of the Vontobel Group. The further development of the index or a company and its share price depends on a large number of company-, group- and sector-specific as well as economic factors. Every investor must take the risk of share price losses into account when making an investment decision. Please note that no current income can be achieved by investing in these products.

The products are not capital-protected; in the worst case, a total loss of the capital invested is possible. In the event of insolvency of the issuer and the guarantor, the investor bears the risk of a total loss of his investment. In any case, investors should note that past performance and/or analysts' opinions are not a sufficient indicator of future performance. The performance of the underlying assets depends on a variety of economic, corporate and political factors that should be taken into account when forming a market expectation.