A solid start to the US earnings season

Last week, it was discussed how the conflict in Iran and the closure of the Strait of Hormuz caused the largest involuntary disruption to the oil supply since 1973. Since Saudi pipeline workarounds fall well short of seaborne crude oil volumes, the situation remains critical.  

However, oil futures have recently retreated from their initial gains following the onset of the conflict. The announcement of truces between the U.S. and Iran, and Israel, has alleviated some supply concerns. Iran subsequent  statement that the "Hormuz Strait is open for business" fueled equities rally on Friday, April 18, while oil futures fell 10 percent, settling around $90 per barrel. U.S. markets posted strong gains for the third consecutive week, with the Nasdaq and S&P 500 rising 6.8 percent and 4.5 percent, respectively. 

In contrast, tensions between Iran and the U.S. appeared to rise again over the weekend ahead of the next anticipated round of peace talks. Both parties claimed that the Strait was closed again. Iran accused the United States of violating the countries’ fragile ceasefire after the U.S. Navy fired on an Iranian-flagged cargo ship in the Arabian Sea and promised retaliation. In response, President Trump threatened to destroy Iran’s power stations and bridges if a deal was not reached. The ceasefire is set to expire on Wednesday, April 22.

In conclusion, the situation remains unclear, and the risk of further escalation remains high. Since very few vessels have passed through the waters since the conflict began, there is a very real danger of an "air pocket" forming in the global oil supply over the coming quarters, and the full impact of the first month of the war has likely yet to be seen. The longer the conflict continues, the greater the impact on energy markets and the global economy will be.

The prospect of high and rising oil prices could bolster shares in energy companies, which have declined in recent weeks despite previous gains. Chevron, for example, is the second-largest US-based oil and gas group. According to consensus estimates compiled by Barron's, the stock is valued at a 2026E price-earnings ratio (PE) of around 16x. Chevron is expected to release its Q1 results on May 1. However, the full impact of higher oil prices and war-related disruptions will likely not be seen until Q2 earnings are released. In the long term, the trend for Chevron shares is positive, with prices reaching levels similar to those at the start of the war. The MA50 level, around USD 192 per share, could be the next upside target. In a bullish scenario, reaching the all-time high of around USD 215 per share seems possible.

However, in general, most equity markets are likely to be negatively affected by higher oil prices. The Japanese economy has a relatively high exposure to oil imports. In contrast, Nikkei 225 is trading close to an all-time high. It suggests investors are sanguine about the risks from higher oil prices. Therefore, there might be downside potential if the conflict in Iran drags on. 

As of Friday, April 20, 10% of all S&P 500 companies had reported their first-quarter 2026 results. According to Earnings Insight, of those companies, 88% reported positive earnings surprises and 84% reported positive revenue surprises. Among S&P 500 sectors, companies in Communication Services and Information Technology have delivered the highest positive earnings surprises thus far in Q1 2026.

This week, we updated the world stock performance rankings. The Nikkei index ranked first in terms of year-to-date (YTD) performance. Compared to the global stock market year-to-date, the other major U.S. stock indices have seen weaker-than-average performance compared to the global stock market year-to-date, with the exception of the Russell 2000 and its U.S. small caps.

On Wednesday, April 22, the following companies listed in Stockholm will submit their Q1 2026 interim reports: ABB, Nordea, Handelsbanken, Tele2, Sandvik, and Alfa Laval. Other Nordic companies submitting quarterly reports include Finnish companies Nokian Renkaat and Metso. Interim reports from the following U.S. companies are also expected: AT&T, Boeing, IBM, Lam Research, Philip Morris, Tesla, and Texas Instruments. . Next are the macroeconomic news headlines, beginning with the U.K.'s CPI and PPI in March. the April confidence indicator for Eurozone households will be released soon. The U.S. Department of Energy will publish weekly oil inventory data.

The following companies listed in Stockholm are scheduled to submit their first quarter 2026 interim reports on Thursday, April 23: Essity, Gränges, Hexagon, Husqvarna, JM, Saab, and Trelleborg. Other companies reporting interim reports include Norway's Europris and DNB, as well as Finland's Nokia and Orion. Interim reports are also expected from Switzerland's STMicroelectronics and France's Sanofi. Moving on to the reporting calendar in the U.S., we find companies such as American Express, Caterpillar, Honeywell International, Intel, Lockheed Martin, NextEra Energy, Thermo Fisher Scientific and Union Pacific. Thursday's macroeconomic news agenda is dominated by April's purchasing managers' indices from Japan, India, France, Germany, the Eurozone, the UK, and the US. France will release a confidence indicator from domestic companies, and the UK will publish CBI industrial trends, both for April. From the U.S., the Chicago Fed National Activity Index for March, the initial weekly jobless claims report, and the Kansas Fed Index for April will be released.

On Friday, April 24, interim reports are scheduled from the following Swedish companies: Electrolux, Indutrade, Nordnet, SCA, Telia, Volvo, as well as from the following Norwegian companies: Norske Skog, Tomra, Yara, and Finnish Kemira. In the U.S., an interim report from Procter & Gamble is expected. Friday’s macro news feed begins with Japan's consumer price index for March. A few hours later, Sweden's producer price index for March and the UK's retail sales for March will be released. Next are a survey of French household confidence and Germany's Ifo index, both for April. Finally, the Michigan index for April will be released from the US.

Equities have surged due to   progress towards a peace deal with Iran and the potential reopening of the Strait of Hormuz. The market has felt unstoppable, with the S&P 500 reaching new highs. However, escalating US–Iran tensions over the weekend caused a change in sentiment on Monday, 20 April, while oil and the US 2-year yield have bounced back from support. RSI is indicating overbought conditions. Unless reporting season can inject fresh momentum, a fall below 7,000 could provide an opportunity to secure some profits, with the next support level around 6,750.

On Monday 20 April, the Nasdaq Composite ended its 13-day winning streak, which was its longest since 1992. This was fuelled by enthusiasm for AI and optimism over the de-escalation of the situation in Iran, but momentum stalled as geopolitical risk resurfaced over the weekend. Although the RSI is in overbought territory, a fall below 26,160 would provide a good opportunity to take some profits, with the next support level at around 25,135.

Broad European risk-on sentiment has lifted export-focused Swedish industrials, as well as the rest of the continent. However, the OMXS30 has yet to reach new highs. Heading into reporting season, the index is holding above EMA9. If it breaks below this level, the MA50, currently at 3,068, will come into play.

The DAX is currently testing the support levels between 24,000 and 24,220. The next step could be a break on the downside and below the MA20, which is currently at 23,445.

EMA 9: 9-day exponential moving average

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