Inside Markets — Earnings Boon

Strong overnight results from META and MSFT push the Q1 blended (actual reports + estimates on remaining) earnings growth rate on the SPX to +12.3% from 7.2% at the end of the quarter. Better-than-feared guidance and tariff mitigation efforts also put a positive spin on the broader equity market.

The SPX is extending toward the upper end of technical resistance but needs to sustain (2 consecutive days) closing levels above ~5650 to break the bearish trend. The rally from the 4/9 reciprocal tariff pause has lifted the index from oversold levels with many constituents now overbought. The advance to current levels has dented our conviction in a full retest of the lows, but ~5650 is strong resistance and equity volatility remains elevated (VIX>22), which has us expecting consolidation into the 4/9 range (midpoint~5200). From a technical perspective, we would look to add exposure on a post-consolidation reversal from oversold levels somewhere in that range. And while it’s not our expectation or preference, we would also look to add exposure if the SPX can sustain closing levels north of ~5650.