The US earnings season is ending strongly

As discussed in a previous article on Rocket Lab (NASDAQ: RKLB), published in September 2025, the stock price has steadily increased over the last eight months. Recent contract wins have put Rocket Lab on par with larger companies, such as Lockheed Martin and Northrop Grumman.  the hype train is moving full steam ahead. However, it's possible that the hype has surpassed the underlying fundamentals.

Since late 2024, US-based space companies have experienced significant upward trading, driven by increasing government spending and the industry's growing attractiveness. Much of this growth is due to increased support from the US government. In April, Washington's policy became more supportive when the administration proposed a record-high $1.5 trillion FY2027 national defense budget, a 38% real increase compared to FY 2026 spending. DoD documentation highlights a 20% increase in Space Force personnel funding. Additionally, in March, the Bureau of Industry and Security (BIS) and the Directorate of Defense Trade Controls (DDTC) issued a final rule shifted most commercial satellites and components out of the International Traffic in Arms Regulations (ITAR), which took effect on April 14, 2026, and eased licensing for U.S. launch providers and spacecraft suppliers.

As for Rocket Lab in particular, the Q1 2026 report was released on Thursday evening, May 7. The company revealed record-breaking figures: revenues increased ~64% year over year (YoY) to just over USD 200 million. Compared to the previous quarter, growth was 11.5%, driven mainly by growth in the satellite platforms business and the solar business unit. Furthermore, the company's backlog more than doubled, surpassing USD 2.2 billion. Regarding profitability, adjusted EBITDA remained negative at a margin of -5.9%, although it grew by ~61% year over year. Following the share pullback in late April, Rocket Lab is expected to regain positive trajectory in the short term due to the strong results presented in the Q1 2026 report.

Valuation levels may far exceed actual fundamentals. The market is pricing in sustained high growth and continued revenue generation from new business areas, such as space data centers. However, space-based infrastructure has not been proven at the scale at which the markets are pricing it. No hyperscaler has committed to a procurement program, the economics of in-orbit data processing have yet to be established yet, and the timeline is entirely speculative. The risk is that the market is pricing in a material probability of a business line without a single signed customer, defined product, or validated unit economics model. Further risk lies in competition; the SpaceX IPO could be the biggest worry. When Neutron launches, it will enter a market where SpaceX's Falcon 9 has over a decade of operational reliability, a cost structure that no new entrant can replicate, and a launch cadence of over 100 missions per year. SpaceX is also developing Starship. If Starship achieves full reusability, it could render the medium-lift segment uneconomical for new entrants. Rocket Lab's Electron has carved out a defensible niche in the small launch market. However, this niche is under pressure from competitors, including those in Europe and China. The window for Neutron to establish itself before the competitive landscape becomes overwhelming may be narrower than the market currently anticipates. 

In summary, although Rocket Lab displayed solid financial performance in the first half of 2026, significant risks are not reflected in current trading prices and multiples. Rocket Lab is trading well above its European and US-based peers and is already at or near many equity research reports' bull case levels. A short opportunity may be presenting itself, with the optimal time for the trade being when the hype and upward momentum peak following the Q1 2026 report.

As of Friday, May 8, 89% of all S&P 500 companies had reported their first-quarter 2026 results. According to Earnings Insight, 84% of these companies had positive earnings surprises, and 80% had positive revenue surprises. In Q1 2026, the top three S&P 500 sectors were Information Technology, Health Care, and Consumer Staples, withrespective shares of positive earnings surprises of 94%, 91%, and 88%, respectively.

On Wednesday, May 13, we will receive interim reports from German Siemens, U.S. Cisco, Japanese SoftBank and Chinese Alibaba and Tencent. The macroeconomic news begins with Japan's current account balance for March. Next, we will move on to Europe, where we will receive the consumer price index for April from Sweden and France. Industrial production data for March and GDP data for the first quarter from the Eurozone are expected. Monthly oil reports from the IEA and OPEC will soon follow . The U.S. will contribute the producer price index for April (see graph below) and weekly oil stock reports from the Department of Energy.

An interim report from Swedish Klarna (listed in New York) is due Thursday, May 14. This is a public holiday in the Nordic region, so the stock exchanges in Copenhagen, Helsinki, Oslo and Stockholm are closed. Turning to macroeconomic news, we start with the UK's GDP for the first quarter and industrial production in March. Spain will report the consumer price index for April. The US will release retail trade and import prices for April, as well as intial weekly jobless claims and unsold goods inventories for March.

On Friday, May 15, the macro news feed will begin with Japan's producer price index for April. Next will be Germany's wholesale prices and Italy's consumer price index, both of which are for April. After that, we will receive the Empire State Manufacturing Index for May and the industrial production report for April from the U.S.

The earnings-fuelled rally that began in April continued to support the S&P 500. As the chart below shows, the RSI remains at overbought levels — a signal that has persisted long enough to test the patience of anyone positioned against the move. Meanwhile, US T-bill yields have risen alongside the oil price, adding a layer of macro complexity to an already overheated market. Timing remains the central challenge, but the short S&P 500, long DAX trade continues to look promising.

The AI spending boom remained the dominant theme of the period. Nvidia reached a new high, driven by unrelenting investment in AI across the chip sector, which reinforced the NASDAQ-100's position as the favoured means of accessing AI on Wall Street. On Monday, there was a slight pullback in hyperscalers and chip stocks, but the broader picture remains intact. As with the S&P 500, the NASDAQ-100 continues to trade at stretched levels, deemed overbought by most technical measures, yet supported by earnings and structural tailwinds that have so far proven hard to dispute.

In the absence of clear AI exposure, the OMXS30 has faced consistent challenges and is currently trading close to the support level of 3,000. A clean break to the downside would expose the 2,925 level.

Meanwhile, Germany’s DAX closed above the 100-day moving average (MA100) yesterday, with the next upside level around 24,665. A long DAX and short S&P 500 trade continues to look appealing.

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