Good Morning,
I hope everyone had a nice weekend. My spring cleaning is always satisfying, but it leaves me wondering (pun intended) how things got so messy in the first place!
Markets ended last week higher as the U.S. extended the ceasefire with Iran indefinitely, though the blockade remains in place and the Strait of Hormuz is still severely restricted. To me, it appears investors are comfortable with the lack of escalation and have shifted their focus back to market fundamentals. From a momentum-driven perspective, I would anticipate any positive deal-related news with Iran could spark a sharp market rally.
On the fundamentals front, it’s a busy earnings week, with approximately 180 S&P 500 companies set to report, including Google, Microsoft, Amazon, Meta, and Apple. Earnings growth so far is up roughly 21% year over year—the strongest pace in about four years. We will also receive the latest PCE inflation reading, which should provide insight into how the recent oil shock has affected the Fed’s preferred inflation gauge.
Additionally, five major central banks are scheduled to meet this week, including the Federal Reserve. This will likely be Fed Chair Powell’s final meeting as Chairman before his term expires on May 15th. No rate changes are expected from any of the five central banks.
Value continues to outperform year to date, a trend I still favor as we remain patient amid ongoing geopolitical uncertainty. As always, please feel free to reach out with any additional questions.
Attached is this week’s Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management.
Have a great week!