- Equities had another positive week last week, adding to all-time highs, as strong earnings from five of the “Mag 7” companies that reported drove markets higher. Additionally, these mega-cap tech names announced higher capital spending revisions for the year ahead, fueling strong performance in AI-related stocks, led by semiconductors. The equity market rally comes despite no resolution in the Middle East, with oil rising last week, pushing both WTI and Brent above $100. We are cautious that markets can continue to rally as the war in the Middle East drags on, especially as it could lead to “higher for longer” interest rate policy.
- In “Mag 7” earnings, all five names that reported—Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Meta (META), and Amazon (AMZN)—beat estimates across every major line while delivering at least +16% sales and +20% EPS growth. Alphabet showed the most immediate AI-related growth (+40% quarterly growth in AI-product revenues). Apple posted strong demand for the iPhone 17 model and provided 2Q26 revenue growth guidance of 14-17%, easily topping expectations of 12%. Microsoft and Meta had more tepid equity market reactions, as they announced large increases in capex without immediate visibility into product growth.
- In other earnings news, memory makers led positive releases, with Seagate (STX), SanDisk (SDNK), and Western Digital (WDC) proving that the industry’s supply shortage is even larger than imagined. Power Equipment and maintenance suppliers Monolithic Power (MPWR) and Quanta (PWR) also crushed expectations and supported the AI-related theme, while the biggest disappointments came from Robinhood (HOOD), Spotify (SPOT), and Roblox (RBLX).
- In the Chair Powell’s last conference as Fed Chair, the Fed held rates steady as expected. The FOMC statement read, in part, “The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. Developments in the Middle East are contributing to heightened uncertainty about the economic outlook. The Committee is attentive to the risks to both sides of its dual mandate,” and noted that “Inflation is elevated.” There were four dissents on the FOMC, with Stephen Miran voting for a -25 bps cut, while Beth M. Hammack, Neel Kashkari, and Lorie K. Logan “did not support inclusion of an easing bias in the statement at this time.”
- As well, Powell announced that he plans to stay on as a Governor for an undetermined period of time (term ends 2028) due to recent legal action from the Administration. We do not read much into all of this, as we believe rates will remain on hold for the time being and that Kevin Warsh will be installed as the next Chair, leading the institution in a new direction.
- That said, we note that last week’s PCE figure confirmed that inflation remains stubbornly elevated above target. In our view, this does reduce the likelihood of rate cuts in 2026. Headline PCE rose by 0.7% MoM and 3.5% YoY, while core PCE rose by 0.3% MoM and 3.2% YoY. All were in-line with estimates. As a reminder, the Fed targets 2% core PCE inflation YoY, a figure that has not been reached since the pandemic.
- March Personal Income and Spending showed strength, while 1Q26 Advance GDP was reported at 2.0%, compared to the estimate for 2.3% on a seasonally adjusted annual (SAAR) basis, and higher than 0.5% in 4Q25.
- In corporate news, Qualcomm (QCOM) soared on reports that it is working with OpenAI for a 2028 release of an AI-focused smartphone. Also, Microsoft announced it will no longer pay for cloud revenue and thus end its exclusive agreement with OpenAI, as the private AI firm now seeks partnerships with other firms.
The Week Ahead
- 1Q26 earnings season continues. Advanced Micro (AMD), Palantir (PLTR), Astera (ALAB), Uber (UBER), AppLovin (APP), AirBnB (ABNB), DoorDash (DASH), Arista (ANET), CoreWeave (CRWV), Coherent (COHR), Disney (DIS), PayPal (PYPL) and McDonald’s (MCD) among companies set to report.
- We get April employment data on Friday. Payrolls are forecast to rise by 65K, compared to 178K in March. The unemployment rate is expected to be unchanged at 4.3%, while average hourly earnings rise by 3.8% YoY (vs. 3.5% prior)..
Market Summary – Returns and Yields
For additional insights, be sure to check out last week’s blog post.
Definitions, sources, and disclaimers
This content is being published by Amerant Investments, Inc (Amerant Investments), a dually registered broker-dealer and investment adviser registered with the Securities and Exchange Commission (SEC) and member of FINRA/SIPC. Registration does not imply a certain level of skill, endorsement, or approval. Amerant Investments is an affiliate of Amerant Bank.
Definitions:
- Gross Domestic Product (GDP): A comprehensive measure of U.S. economic activity. GDP is the value of the goods and services produced in the United States. The growth rate of GDP is the most popular indicator of the nation’s overall economic health. Source: Bureau of Economic Analysis (BEA).
- GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model. In particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal dynamics of the model.
- The Current Employment Statistics (CES) program produces detailed industry estimates of nonfarm employment, hours, and earnings of workers on payrolls. CES National Estimates produces data for the nation, and CES State and Metro Area produces estimates for all 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, and about 450 metropolitan areas and divisions. Each month, CES surveys approximately 142,000 businesses and government agencies, representing approximately 689,000 individual worksites. Source: Bureau of Labor Statistics (BLS).
- Initial Claims: An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. However, these are weekly administrative data which are difficult to seasonally adjust, making the series subject to some volatility. Source: US Department of Labor (DOL).
- The Consumer Price Index (CPI): Is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. Average price data for select utility, automotive fuel, and food items are also available. Source: Bureau of Labor Statistics (BLS).
- The national unemployment rate: Perhaps the most widely known labor market indicator, this statistic reflects the number of unemployed people as a percentage of the labor force. Source: Bureau of Labor Statistics (BLS).
- The number of people in the labor force. This measure is the sum of the employed and the unemployed. In other words, the labor force level is the number of people who are either working or actively seeking work.Source: Bureau of Labor Statistics (BLS).
- Advance Monthly Sales for Retail and Food Services: Estimated monthly sales for retail and food services, adjusted and unadjusted for seasonal variations. Source: United States Census Bureau.
- Federal Open Market Committee (FOMC): Responsible for implementing Open market Operations (OMOs)–the purchase and sale of securities in the open market by a central bank—which are a key tool used by the US Federal Reserve in the implementation of monetary policy. Source: Federal Reserve.
- The Federal Funds Rate: Is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. When a depository institution has surplus balances in its reserve account, it lends to other banks in need of larger balances. In simpler terms, a bank with excess cash, which is often referred to as liquidity, will lend to another bank that needs to quickly raise liquidity. Source: Federal Reserve Bank of St. Louis.
- The “core” PCE price index: Is defined as personal consumption expenditures (PCE) prices excluding food and energy prices. The core PCE price index measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices to reveal underlying inflation trends. Source: Bureau of Economic Analysis (BEA).
Sources: U.S. Bureau of Economic Analysis (BEA), Bureau of Labor Statistics (BLS), U.S. Department of Labor (DOL), Federal Reserve, Federal Reserve Economic Database (FRED), Federal Reserve Bank of Atlanta, U.S. Census Bureau, Department of Housing and Human Development (HUD), U.S. Department of Agriculture, U.S. Energy Information Administration (EIA), U..S Department of the Treasury, Office of the United States Trade Representative (USTR), U.S. Department of Commerce, data.gov, investor.gov, usa.gov, congress.gov, whitehouse.gov, U.S. Securities and Exchange Commission (SEC), Morningstar, The International Monetary Funds (IMF), The World Bank (WB), European Central bank (ECB), Bank of Japan (BOJ), European Parliament, Eurostats, Organization for Economic Co-operation and Development (OECD), National Bureau of Statistics of the People’s Republic of China, Organization of the Petroleum Exporting Countries (OPEC), World health organization (WHO).
Financial Markets – Recent Prices and Yields, and Weekly, Monthly, and YTD (Table): Bloomberg, Weekly Market Data is in USD and refers to the following indices: Macro & Market Indicators: Volatility (VIX); Oil (WTI); Dollar Index (DXA); Inflation (CPI YoY); Fixed Income: All U.S. Bonds (Bloomberg Aggregate Index); Investment Grade Corporates (Bloomberg US Corporate Index); US High Yield (Bloomberg High Yield Index), Treasuries (ICE BofA Treasury Indices); Equities: U.S. Industrials (Dow Jones Industrial Average); U.S. Large Caps (S&P 500); U.S Tech Equities (Nasdaq Composite); European (MSCI Euope), Asia Pacific (MSCI AP), and Latin America Equities (MSCI LA); Sectors (S&P 500 GICS Sectors) Source: Bloomberg. Fed Funds Rate probabilities, Source: CME FedWatch Tool.
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The information provided here is for general informational purposes only and should not be considered a customized recommendation, personalized investment advice offer, or solicitation for the purchase or sale of any security or investment strategy. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own situation before making any investment decision.
This information is obtained by AMTI from third-party providers from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. All expressions of opinion are subject to change without notice in reaction to changes in market conditions. By using such information, you release and exonerate AMTI from any responsibility for damages, direct or indirect, that may result from such use. Consult the issuer of any investment for the most up-to-date and accurate information.
All references to performance refer to historical data. There could be benchmarks used that do not reflect the performance of funds or other products with similar objectives
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Additional Risks:
- Past performance is no guarantee of future returns.
- There is no assurance the Fund will pay distributions in any particular amount, if at all. Any distributions the Fund makes will be at the discretion of the Fund’s Board of Trustees
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- The value of the investments varies and therefore the amount received at the time of sale might be higher or lower than was originally invested. Actual returns might be better or worse than the ones shown in this informative material.
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- Funds may invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be illiquid and difficult to value
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