Shesa's Weekend Stock Market Updates - 4|18|26

Welcome to my weekend updates

Last week the stock market had a huge run. A couple of weeks ago, Nadaq and S&P were in the correction territory and all of a sudden we saw a turnaround.  Both Nasdaq and S&P 500 hit new all-time high last week. On Friday, the S&P 500 closed above 7,100 for the first time, Nasdaq posts longest 13th consecutive win streak since 1992. The turnaround in the market surprised most of the investors and traders alike! It was too much too fast from negative to positive sentiment. Why did it happen? I will share my view later. Let's a take a look to the indexes:

S&P 500 hit new record at 7,126, up +4.5% for the week. Nasdaq, up +6.8% to 24,468. DOW closed at 49,447. The Russel 2000 Small Cap Index is up about 12% year to date beating all other indexes. What caused this rally?  Easing Iran tensions (Strait of Hormuz reopened, ceasefire hopes) sent oil price sharply lower. Producer Price Index (PPI) for March rose just 0.5% (cooling wholesale inflation, better than feared). And more importantly, the short sellers ran to exit (short covering). It can be noted that there were humongous hedging and short sell as lots of investors expected the stocks to fall further. And short sellers got trapped. Markets now eye next week’s earnings. The AI related stocks, software stocks and Quantum Computing stocks had a big turnaround. I like the AI stocks but I will be careful about Software stocks. If market comes down the software stocks may be hit hard. 

Producer Price Index (PPI) for March 2026 (released on April 14):
MoM: Actual 0.5% vs. expected 1.1% (lower than forecast). 
YoY: Actual 4.0% vs. expected 4.6% (lower than forecast).

Other News
  • Tesla (TSLA) Earnings on Wednesday. After a few months the stock closed above $400. 
  • NVDA closed above $200 after many months. 
  • META plans to layoff another 8K employees.
  • IONQ shares surged about 20% on Tuesday after the quantum computing firm said it received a contract from the Federal Government's Defense Advanced Research Projects Agency for a program focused on linking different types of quantum systems.
Earnings Last Week
TSMC (TSM) had a very good quarter and guided above expectations. 
  • Revenue: Actual $35.9B vs expected $35.5B 
  • Net profit: Up 58% YoY to record; beat expectations.
  • Q2 Guidance: $39.0–$40.2B vs $38.1B.
  • JPMorgan (JPM): Strong beat on record trading revenue.
  • Citigroup (C): Beat with +42% profit jump from volatility.
  • Bank of America (BAC): Beat on trading & investment banking.
  • Wells Fargo (WFC): Mixed — profit rose but missed estimates.
Earnings this week
  • Tesla (TSLA): Wednesday, April 22 after close. This is one of the most important earnings that I will be looking forward. I am not looking for huge revenue or earnings beat but my focus will be on what Elon Musk says about Cybercab, RoboTaxi, FSD, Optimus, API Chips, Energy etc. I will write more after the earnings next week. 
  • 4/20: Intel (INTC): Monday April 20 after close.
  • 4/22: Lam Research (LRCX): I will be looking this one too.
  • Others: ServiceNow (NOW), IBM,  Intuitive Surgical (ISRG)
Economic News this week
TUE, 4/21: Retail Sales
THU, 4/23: U.S. manufacturing PMI, Sevice PMI
FRI, 4/24: Consumer sentiment

Stocks to Watch
TSLA, NVDA, HIMS, LRCX, MU, SOXL, NBIS, APLD, CRWV, IONQ, META, AVGO, NFLX, USO, UVIX. 

Can the Stock Market Rally Continue?
I do not have any idea but I can share my brief opinion. The Nasdaq has gone up for 13 consecutive days which is a record in 34 years. It's sitting on at all-time highs. It is trading around 10% above its 50-day moving average and in most overbought condition in six months. Historically, a level that produces either a 5% to 10% pullback  or go up depending entirely on the earnings surprises or goes as per expectations.  The risk is that even a good quarter may also be not good enough. So, I guess it's better to be watchful for next few weeks during the earning season as stocks have gone up too much too fast. But stocks were having momentum, hence it can go either way. Only time will tell. So, better to be watchful. Meanwhile, as I write this update, Stocks futures are down on the news that "Trump said U.S. had fired on and seized an Iranian-flagged cargo ship in the Gulf of Oman. This comes after Iran declined to join another round of peace talks in Pakistan planned by the U.S.". So, always it's better to have little bit of hedging in uncertain market. Also, if and when there is a pullback we can plan to slowly accumulate if we liked something but missed the opportunity earlier. 

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