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The U.S. made clear over the past week it has focused its trade war primarily on China. In addition, the White House opened talks with Japan and at least Italy, if not the European Union, as trading partners attempt to barter down at least some of the barriers thrown up between the U.S. and the world. Stock market investors felt enough equilibrium to maintain the market’s rally attempt begun on April 7.
That puts IBD investors on the lookout for a follow-through day. At the same time, markets are keenly tuned to earnings news and comments from companies on impact from and strategy for dealing with the ongoing trade war. The coming week’s tech roster boasts reports from Alphabet (GOOGL) and Tesla (TSLA). Verizon (VZ) and Boeing (BA) lead the lineup of Dow names due to report, with Boeing acting as a key game piece in the U.S./China firefight. GE Aerospace (GE) and a contingent of leading defense names also report, providing possible clues to strained rollout of the Pentagon’s spending plans.
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Tesla Stock Is Struggling. Will Earnings Be A Speed Bump Or A Positive Catalyst?
Stocks To Watch: On The Hunt For Strength
The stock market remains in a correction, despite an ongoing rally attempt. An increasing number of stocks appear to be setting up in bases, particularly double-bottom patterns. It’s a time to be looking for stocks with strong relative strength, but primarily to watch, not buy. Adtalem Global Education (ATGE), Spotify (SPOT), Palantir Technologies (PLTR), Marex (MRX) and Loar (LOAR) are all near buy points with strong RS lines. Adtalem, Marex and Loar come from very different industries, but all are clearly above their 50-day lines and near buy points. Spotify and Palantir are trading around that key technical level of support, and both are in double-bottom bases after big run-ups.
U.S., China Trade Initial Blows
The week began with global markets trying to get their bearings after President Donald Trump’s April 9 pause of U.S. “reciprocal” tariffs, followed by a carve-out for China-made electronics late on April 11. That left 145% duties on remaining Chinese imports to the U.S., a blanket 10% tariff on all other U.S. imports, plus the 25% tariffs specifically placed on autos, steel, aluminum and some auto part imports. The White House is considering requests for deep sea mining leases in an attempt to counter China’s halt on a half dozen rare earth metals critical to some EV, aerospace and energy markets. And China barred its domestic airlines from any deals with Boeing, the largest U.S. exporter.
Automotive: What’s Next For Tesla, Musk?
Tesla reports Q1 results Tuesday, with analysts expecting a 4.4% profit decline and sales nearly flat vs. a year ago. The EV giant in early April announced worse-than-expected Q1 vehicle deliveries as Chief Executive Elon Musk’s political advocacy and work with the Trump administration seem to weigh against the brand. Piper Sandler analysts recently wrote that Tesla’s Q1 financials “will likely underwhelm,” with gross margins “near multiyear lows.” Investors will listen for news on the long-awaited, more affordable EV model, trade war impact, the planned June 2025 rollout of robotaxis in Austin and when Musk will move away from his role in the Trump White House.
Blue-Chip Tracker: Boeing, Verizon Lead Dow Earnings
Verizon leads the five Dow industrials stocks due to report in the coming week. Boeing will receive attention as a focal point in the trade war. Merck (MRK), Procter & Gamble (PG) and IBM (IBM) also report. Analyst targets are soft across the group, though Boeing’s projected numbers pick up sharply through the year. Merck is forecast to see a second half rebound.
Mag 7 Earnings: Google Gavels In Q1 Results
Google-parent Alphabet reports Q1 earnings after the market close on April 24. Analysts project a 6% earnings gain, with revenue up 11%. Cloud-computing revenue growth is pegged at 28%. Meanwhile, investors will be keen for details on the $6.6 billion lawsuit filed by British businesses claiming market manipulation as well as the U.S. Department of Justice case, in which a District Court judge ruled Thursday that Google had violated antitrust law.
Aerospace: GE Celebrates Its First Birthday
GE Aerospace reports Q1 earnings early Tuesday. Shares are up 30% since its year-ago spinoff as a stand-alone company, despite a recent pullback. FactSet expects earnings per share of $1.26, compared with EPS of 82 cents last year. Sales are estimated to come in at $9.05 billion. Analysts predict space-systems revenue will be down 24%, but offset by sales gains across aeronautics, defense and mission systems. GE stock is up 9.4% this year.
Defense: Pentagon Spending Outlook Improves
Morgan Stanley on Wednesday upgraded the defense sector, with Lockheed Martin (LMT) and others set to report. FactSet analysts expect Lockheed to deliver flat earnings on 3.3% revenue growth. Rival RTX (RTX) targets a slight uptick in earnings to $1.35 per share on 2.6% revenue growth to $19.81 billion. For Northrop Grumman (NOC), FactSet expects single-digit slips in earnings and sales. All report on Tuesday.
Insurance: Trying To Follow Travelers Footsteps
A handful of insurance names are worth watching after Travelers (TRV) blew out expectations with its Q1 report on Thursday. Chubb (CB), Aon (AON) and the fast-moving W.R. Berkley (WRB) are all due to report in the coming week.
Dow Jones Insurer Shrugs Off California Wildfires With Blowout Earnings
Stock Market Earnings Briefs
Philip Morris International (PM) reports first-quarter earnings and revenue before the market opens Wednesday. Analysts project quarterly profit growing 7.3% with sales increasing 4%. PM stock is toward the top of the S&P 500 index, running 33% higher in 2025. The tobacco giant is betting on its smoke-free offerings, with the popular Zyn nicotine pouch leading the way, to boost revenue through the end of the decade.
Penumbra (PEN) will report its first-quarter earnings after the market closes on Wednesday. The company, which makes treatments for neurovascular and peripheral vascular diseases, is expected to earn an adjusted 67 cents per share on $316 million in sales. Earnings would surge more than 63% as sales climb 13%.
O’Reilly Automotive (ORLY) stands ready to sell more parts to a car fleet set to age as the U.S. enters what’s forecast to be a period of rising new car prices and decreased demand. Shares are up almost 18% this year and holding nice support. Analysts see an earnings growth uptick from low- to high-single digits. The company reports Wednesday.
T-Mobile US (TMUS) reports Q1 financial results after the market close on Thursday. Analysts estimate EPS of $2.47, up 24%, with revenue rising 5% to $20.6 billion. T-Mobile is again expected to lead AT&T (T) and Verizon Communications (VZ) in postpaid phone subscriber additions. Analysts expect T-Mobile to add 502,000 postpaid phone subscribers.
Agnico Eagle Mines (AEM) reports Q1 results on Thursday. The general “risk off” mood in markets, and the recent, unexpected exodus from bonds, has sent gold prices up 26% this year. A four-month rally thus lifted Agnico shares more than 55%, with a strong earnings view through the year. Executive comments on the trade war from the Toronto-based mining outfit could be of particular interest.
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