Macro Week Ahead: Are Stock Markets Really as Strong as They Seem?
The S&P 500 has risen 4.5% since the US struck Iran in late February, with blended S&P 500 earnings growth tracking at 15.1% year-on-year, but underlying data shows warning signs, including lower volumes and surging input cost pressures. Central banks, including the Fed and ECB, face high-stakes rate decisions that may impact stock markets.
Wall Street is pushing to record highs as earnings season gets underway. The S&P 500 has risen 4.5% since the US struck Iran in late February, erasing its wartime selloff. However, underlying data shows warning signs, including lower volumes and a negative divergence in the relative strength index momentum indicator. Blended S&P 500 earnings growth is tracking at 15.1% year-on-year, with the tech sector running at 46.3%. Input cost pressures are surging, with US implied inflation readings at their highest since 2022. Central banks, including the Fed and ECB, are expected to hold policy rates unchanged but will provide guidance on future rate decisions.
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