This Week in Markets - April 27: Mega Cap Earnings, GDP, and the First Test of New Highs
A stacked week of economic data meets the heart of earnings season
Welcome back to another weekly market prep with The Dividend Journal! If this is your first time here, great timing. This newsletter is your one stop shop to stay ahead of the market and step into the week fully prepared.
Last week was relatively quiet after the fireworks of the Tesla report and the Strait of Hormuz news. The S&P 500 held its gains, consolidated a bit before closing at new highs. This week is different. We're entering the busiest stretch of earnings season with four of the Magnificent Seven reporting, plus GDP data that will tell us whether Q1 growth held up under elevated energy costs.
Let's get into it.
📊 Last Week Recap
The S&P 500 broke above 7,000 and held it on a strong weekly close, per CNBC. Action was choppy mid-week as the market digested earnings, but the bulls held the close.
Tesla's Wednesday report delivered mixed results. Revenue came in at $22.39 billion, slightly above the $22.1 billion consensus, but automotive margins compressed to 14.2% from 16.3% a year ago. The real story was the Q&A session where Elon confirmed the next generation compact vehicle remains on track for late 2027 production. The stock finished the week down 6% as investors digested the margin pressure.
On the economic front, retail sales data showed consumers pulled back slightly in March, with headline sales up just 0.2% versus the 0.4% expected. Core retail sales (excluding autos and gas) were flat. That's the first sign that elevated energy costs may be starting to bite, though the data isn't alarming yet.
The Kevin Warsh Fed Chair confirmation hearing began Tuesday and will continue this week. The tone so far has been contentious, with Democrats pressing hard on independence from the White House. Warsh emphasized his commitment to the Fed's dual mandate and pushed back on suggestions he would cut rates on political timelines.
📅 This Week's Economic Calendar
Tuesday, April 28: Consumer Confidence (10:00 AM ET) and the FOMC meeting begins. This is the Conference Board's measure of how households feel about jobs, income, and the economy overall, and a soft print would add weight to the disinflation case heading into Wednesday's Fed decision.
Wednesday, April 29: FOMC Rate Decision at 2:00 PM ET, followed by Chair Powell's press conference at 2:30 PM ET. Markets are pricing roughly a 94% probability of no change per CME FedWatch. The statement language and any hint at the path forward will set the tone heading into Thursday's GDP print and the heart of mega cap earnings.
Thursday, April 30: Q1 GDP Advance Estimate + PCE (8:30 AM ET). This is the data print that confirms or contradicts the Fed's growth narrative. Consensus is around 1.8% annualized growth. A weak print combined with a hawkish FOMC the day before would be a real test of the rally.
Friday, May 1: ISM Manufacturing PMI (10:00 AM ET). Manufacturing has been in contraction territory for most of last year. A move back above 50 here would be a meaningful signal that the broader economy is reaccelerating. The April Jobs Report follows next Friday, May 8.
Earnings this week, courtesy of Earnings Whispers:
This is the most important earnings week of the quarter. Five Magnificent Seven names report, and their guidance will set the tone for the rest of the year.
📈 Market Update
SPY 0.00%↑- The market retested the daily 9EMA Thursday and saw an aggressive buy reaction to new highs. This type of PA is representative of a strong uptrend and shows resilience of this trend. This is exactly what we want to see when dips are seen, they should be shallow and bought up quickly.
With all the catalyst this week, we are at a pivot point for whether we consolidate a bit or move onto the next leg up.
Bitcoin - Price is currently holding up really well in this uptrend over the weekend. We’re approaching the 80k resistance spot and price is looking like it wants to break past. If anything, crypto’s price action will be a big tell for where the rest of the market can potentially go this week.
🔍 What I'm Watching
COIN 0.00%↑ - With crypto curling, COIN 0.00%↑ is looking like a great candidate to add based on this base developing. The daily EMAs have curled back to an uptrend and volume is beginning to decline. A definitive daily close over the 213 area is confirmation of this move.
EWY 0.00%↑- This ETF just printed a highest weekly close ever with Samsung reporting ER this week. Expecting a continuation move on this as memory continues to become integral to the AI infrastructure build out.
HIMS 0.00%↑ - nice daily flag brewing after quite a bit of news about peptides and GLP. A break of 32 is the trigger for the confirmation of this flag break and 35+ can come very quickly.
GLW 0.00%↑- With photonics in theme and in high demand, I am very interested in this name going into ER. We already have a position on this and am planning to swing through ER but this is top of the list for a potential post-ER trade.
💡 My Take
This week is about validation. The market rallied hard on geopolitical relief and now needs fundamental confirmation that earnings can support valuations at these levels. The Magnificent Seven make up roughly 30% of the S&P 500's market cap. Their results and guidance will determine whether this rally has legs into the summer.
GDP is the wildcard. A weak print combined with disappointing mega cap earnings would be a one-two punch that likely sends us back toward at least the previous ATH spot. A strong GDP print with solid earnings creates the conditions for a sustained push to new highs.
Position sizing matters this week more than most. The range of outcomes is wide. I'm keeping positions at half size through the major reports and will scale up once the direction becomes clearer.
See you next week. Trade well.
Will