Welcome to Michael Kramer’s pick of the top three market events to look out for in the week beginning Monday 21 April.
The coming week is relatively light on economic calendar, giving traders the opportunity to focus on company results as earnings season steps up a gear. Elon Musk’s Tesla and fellow ‘magnificent seven’ member Alphabet are among the big names due to report their latest numbers. This earnings season may be even more critical than usual as investors listen closely for any clues about the potential impact of tariffs on businesses and their earnings outlooks. It is worth pointing out that consensus estimates on S&P 500 earnings for 2025 have fallen to $263.05 per share, down from $274.02 in June 2024, a decline of 4%. Estimates could come down further if companies issue weak earnings projections.
Tesla Q1 earnings
Tuesday 22 April
Tesla is expected to report that its first-quarter earnings decreased 13.8% year-on-year to $0.42 a share, based on analysts’ estimates, as sales are projected to come in 6.9% lower than a year ago at $21.4bn. Gross profit margin is forecast to have tightened to 15.8%, down from 17.9% in the fourth quarter and from 18.3% a year ago. Since the electric carmaker doesn’t provide traditional guidance, investors are likely to focus on metrics including its outlook for total deliveries in 2025, margin expectations, and expenses.
The options market is pricing in a significant post-earnings share price move of 10% higher or lower. Shares of the Nasdaq-listed company were down 36.3% year to date at $241.55 at the close on Wednesday. Despite the stock’s drawdown, options traders remain bearish based on gamma positioning for the expiration week of 25 April. In fact, there is a significant build-up of gamma at $240, which could act as support. However, implied volatility is expected to drop once the event risk of the Q1 earnings announcement passes, which may trigger bullish market-maker hedging flows, potentially pushing the shares higher.
Although Tesla stock has been trending lower recently, it is well positioned to break above the trend line around $260, based on analysis of the chart below. If a break to the upside should occur, the stock may rise to around $290. However, if the company reports disappointing results and breaks below the options gamma level at $240, the stock could fall to around $220.
Tesla share price, July 2024 – present
April PMI data
Wednesday 23 April
Purchasing managers’ index data for April from the UK, the US and Europe is likely to give investors their first look at how the US-led trade war is beginning to impact business. The PMI figures, which serve as an economic comparison of leading industrialised nations, may shed light on whether the US – and the world, for that matter – is about to enter a period of slower growth.
The impact from any economic slowdown is likely to be felt keenly in the US, where the minimum 10% levy on imports from all countries – which came into effect on Saturday 5 April and is unaffected by the 90-day pause that president Donald Trump announced for some tariffs on 9 April – is expected to result in rising consumer prices. In this uncertain, risk-off environment, investors are offloading US assets such as equities. Reduced demand for the dollar is boosting rival currencies, with the euro among the beneficiaries.
This is one reason why the EUR/USD has been strengthening in recent weeks. The pair is now testing resistance at $1.14, and if it manages to break above that level, the next resistance area is at about $1.166. To the downside, EUR/USD has support at $1.125 and, below that, at $1.109.
EUR/USD, 2021 – present
UK March retail sales
Friday 25 April
Economists estimate that UK retail sales fell 0.3% month-on-month in March, down from an increase of 1% in February. On an annual basis, retail sales are expected to have grown 0.7% in March, down from February’s 2.2% uptick. Ordinarily, a decline in retail sales weakens the pound, but the impact is relative to the currency you’re pairing the pound against. Weakness in the US dollar could outweigh the effect of potentially disappointing UK retail sales, meaning that the pound may continue to strengthen against the dollar in the near term.
GBP/USD has rallied aggressively since 8 April and remains in an uptrend. The pair broke above a key level of technical resistance at $1.313 on its way to current levels just above $1.324. There is a minor resistance zone around $1.342, which has marked the upper end of the current rally’s range. If the pound can clear this hurdle, a stronger resistance level awaits at around $1.364, an area that cable last reached in January 2022. This area may become a target for bullish GBP/USD traders in the coming weeks, regardless of any upcoming economic data.
GBP/USD, 2021 – present
The coming week’s major economic announcements and scheduled US and UK company reports include:
Monday 21 April
• Australia, Canada, eurozone, New Zealand, UK: Markets closed (Easter Monday)
• China: People’s Bank of China interest rate decision
• Germany: Monthly Bundesbank report
• New Zealand: March imports, exports and trade balance
• US: IMF meeting (to Sunday 27 April)
Tuesday 22 April
• Australia: April Judo Bank purchasing managers’ index (PMI) data
• Eurozone: April flash consumer confidence index
• Results: Danaher (Q1), Elevance Health (Q1), GE Aerospace (Q1), Intuitive Surgical (Q1), Lockheed Martin (Q1), RTX (Q1), Tesla (Q1), Verizon (Q1)
Wednesday 23 April
• Eurozone, France, Germany, UK, US: April flash PMI data
• Canada: Bank of Canada interest rate decision
• Results: AT&T (Q1), Boeing (Q1), Boston Scientific (Q1), Chubb (Q1), CME (Q1), GE Vernova (Q1), IBM (Q1), Lam Research (Q1), Nextera Energy (Q1), PensionBee (Q1), Philip Morris International (Q1), ServiceNow (Q1), Texas Instruments (Q1), Thermo Fisher Scientific (Q1)
Thursday 24 April
• Germany: April IFO business sentiment index
• Japan: April Tokyo consumer price index (CPI)
• US: Weekly initial jobless claims to 18 April
• Results: Alphabet (Q1), Asos (HY), Bristol-Myers Squibb (Q1), Comcast (Q1), Fiserv (Q1), Gilead Sciences (Q1), Intel (Q1), Pepsi (Q1), Procter & Gamble (Q3), T-Mobile US (Q1), Union Pacific (Q1)
Friday 25 April
• Canada: February retail sales
• UK: March retail sales
• US: April University of Michigan inflation expectations index
• Results: AbbVie (Q1)
Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.
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