The Monday Report – 27 April 2026

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This story features EUROPEAN LITHIUM LIMITED, and other companies.
For more info SHARE ANALYSIS: EUR

US Markets continued to dance to a bullish beat, with the S&P500 and Nasdaq reaching fresh all time highs on Friday.

US futures have open lowered, indicating down -0.3% for S&P500 as US-Iran negotiations failed to take place on the weekend.

The ASX200 fell last week and futures are pointing to a flattish-softer start though negative US futures could weigh on sentiment.

Volumes are expected to be thin with some states, including NSW, on holiday.

Good Morning,

The ASX200 finished down -160 points or -1.79% lower last week at 8786.

The decline was largely driven by stock-specific weakness following earnings downgrades, coupled with ongoing concerns around Australia’s fuel security with no signs of an imminent resolution to the Middle East stand-off.

The week’s worst performing sectors were Healthcare, down -6.35%, Financials, off -2.84%, Materials, down -2.08%, and Telcos, down -0.34%.

In contrast, Consumer Staples rose 2.77%, Utilities gained1.79%, Real Estate added 0.28%, and Consumer Discretionary rose 0.15%. 

Today’s Big Picture, J.L. Bernstein extract 

DOJ Drops Powell Probe, Warsh Path Clears

Pirro abandoned the criminal investigation and handed it to the Fed’s Inspector General.

Tillis had the whole Senate on hold until that probe closed. Now it’s closed.

Kalshi odds on Warsh getting confirmed by May 15 moved from 30 cents to 86 cents in hours.

Consumer Sentiment Hits a 70-Year Low

Final April Michigan reading came in at 49.8, the lowest print in the 70-year history of the survey.

Worse than 2008. Worse than COVID. Worse than the 70s inflation shock.

Retail sales and bank earnings say households are still spending fine.

When mood and wallet disagree, I trust the wallet.

Uncle Sam’s Intel Trade Is Up Roughly US$27 Billion

Treasury converted US$8.9 billion of unpaid CHIPS Act grants into Intel equity at US$20.47 back in August.

Intel closed near US$83 today. That’s about US$27 billion in paper gains for the government.

I’m not sold on taxpayer equity stakes as policy, but the scoreboard says what it says.

Weekly Focus, A lot of talk but little progress, Dankse Bank extract

Last week’s optimism regarding the war in Iran faced at least a partial reality check this week, as energy traffic at the Strait of Hormuz remains effectively frozen.

Trump announced an extension to the ceasefire with Iran, but tangible progress in the actual negotiations seems elusive.

Trump also announced a three-week extension to the ceasefire between Lebanon and Israel, but oil markets were little affected, as the price of Brent crude has risen back to around US$105/barrel.

Prices of refined oil products, like jet fuel or diesel, have also seen renewed upticks. The equity market rally took a breather, with European indices underperforming their American equivalents, and the EUR/USD rate declined back below 1.17.

Over the coming days and weeks, markets will increasingly focus on not just what happens on the ground in Middle East, but also the economic impact across the globe.

This week’s April flash PMIs offered a mixed but also distorted bag of signals. Manufacturing indices moved higher across the US, UK, euro area, Japan and Australia, but lengthening delivery times and front-loaded new orders amid expected price hikes and supply shortages likely contributed to the upticks.

Notably, the euro area recorded a clear down tick in services sector business activity (47.4; March 50.2), which could be a concerning sign of the negative sentiment effects. Unsurprisingly, leading indices for both input and output prices rose sharply across the different economies and sectors.

As such, both the ECB and the Fed will have plenty of mixed data and unclear geopolitical signals to digest in their next week’s meetings. We expect both central banks to leave their monetary policy unchanged for now and wait for more clarity before reacting. 

Eventually, we expect the ECB to hike rates twice in the summer, in the June and July meetings. Even if policy rate hikes can do little about the first-order cost pressures stemming from the war, we believe the ECB will focus on ensuring inflation expectations remain well anchored by modestly tightening its policy.

We see a good chance the policymakers will ultimately end up cutting rates again earlier than markets expect, already during the spring of 2027.

In contrast, we expect the Fed to maintain a steady hand through summer and eventually resume its rate cutting cycle in September and December.

In his hearing at the US Senate, Kevin Warsh emphasized the importance of differentiating between the underlying pace of inflation and supply-driven level shifts in prices, and that the Fed should only react to acceleration in the former.

Elsewhere, Bank of England, Bank of Japan and Bank of Canada are all widely expected to maintain their policy stances unchanged. 

On the data front, perhaps the most interesting releases will be euro area’s flash April inflation and Q1 GDP, released just hours before the ECB’s rate decision.

We forecast headline inflation at 2.8% y/y and core inflation at 2.3% y/y.  

Q1 GDP data is due for release also from the US and Sweden, while China releases the latest set of official PMIs on Thursday.

ANZ Bank, Macro Overview extract

We will receive the Australian 1Q CPI data on 29 April. We expect trimmed mean inflation to have risen 0.9% q/q in 1Q, with annual growth accelerating to 3.6% y/y.

This would see quarterly trimmed mean inflation track broadly in line with the RBA’s February forecast of around 0.9% q/q growth in 1Q.

Our forecast has some upside risk, with a 1.0% q/q print more likely than 0.8% q/q. Headline inflation is likely to have risen 1.4% q/q, with annual growth lifting to 4.1% y/y.

The expected divergence between headline and trimmed mean inflation partly reflects the impact of higher fuel prices in March. We are forecasting a 35% m/m rise in automotive fuel in March, which should see headline inflation increase 1.2% m/m in the month.

Trimmed mean inflation is likely to have risen 0.2% m/m in March, or 3.3% y/y.

We continue to expect the RBA to raise the cash rate by 25bp at its May 5 meeting. Beyond that, we expect it to pause, with activity data likely to soften sufficiently and prevent any further rate increases.

Australia’s Budget 2026-27 (due 12 May) is expected to show little change in headline fiscal aggregates relative to last December’s Mid-Year Economic and Fiscal Outlook.

We anticipate underlying cash deficits of around -$37bn in 2025-26 and -$36bn in 2026-27, with deficits averaging close to -1% of GDP over the forward estimates. The broad fiscal stance will remain more supportive of growth than in the pre-pandemic years.

Three themes are expected to underpin the budget.

In the near term, additional temporary cost-of-living relief for households and businesses is likely, potentially including an extension of fuel excise relief.

In the medium term, energy security is expected to be a key focus.

In the long term, changes to the taxation of investment properties will strengthen the fiscal position over the next decade and help underpin a rise in revenues as a share of GDP.

Market Brief, Lance Roberts, The Bull/Bear Report extract

Last week, we noted that after the sharpest rally since May 2025, a correction was likely. Notably, those corrections come in two forms: a price pullback or a sideways consolidation. We got the latter.

The S&P500 churned between roughly 7,080 and 7,140 for most of the week. But Friday, did make a push to all-time highs. That kind of tight, high-level consolidation following an explosive move is technically constructive.

Historically, it suggests the market is digesting gains rather than distributing them.

The week’s dominant drama was, again, Iran, but with a different texture than in prior weeks. The original two-week ceasefire was set to expire Tuesday, and markets sold off Monday as the U.S. Navy seized an Iranian container ship in the Gulf of Oman and Iran’s Revolutionary Guard fired on a tanker inside the Strait.

Oil surged back above US$97, and the S&P fell -0.63%. Then, on Tuesday evening, Trump extended the ceasefire indefinitely. He cited Iran’s government as “seriously fractured” and awaiting a unified Iranian proposal.

Markets bounced on Wednesday, oil retreated back toward US$88-US$92, and the VIX slid below 19. On Thursday, the markets pulled back again, but on Friday, they rallied. It’s enough volatility to make trading difficult.

The other institutional event of the week was Kevin Warsh’s confirmation hearing before the Senate Banking Committee for Fed Chair. Warsh told senators he would be “strictly independent” and would not allow Trump to influence rate decisions, a reassuring signal.

Mohamed El-Erian assessed his testimony as “very well balanced.” 

He suggested Warsh would err on the side of cutting rates earlier if the dual mandate warranted it. Markets took comfort. The 10-year Treasury yield held near 4.30%, and rate hike odds have retreated meaningfully.

Earnings are doing the heavier lifting. With 86 S&P500 companies reporting, 1Q earnings are running 26.1% above year-ago levels, with revenue growth of 10.3%. That is a substantial beat rate that is rewriting the macro narrative.

GE Vernova surged 13.75% after a stunning quarter that included a US$13 billion sequential backlog increase. It also pulled forward its US$200 billion backlog target to 2027 from 2028, and raised full-year guidance across every key metric.

Boeing climbed more than 5% on a smaller-than-expected quarterly loss and improving delivery data. Citigroup reported net income up 42% and Markets revenue above US$7 billion. Tesla beat on margins and cash flow, with the stock absorbing the results constructively.

Most importantly, the earnings revision cycle is turning favorable precisely when it is most needed. S&P500 EPS estimates for 2026 have risen 4% since late January, according to Goldman Sachs.

Furthermore, the sectors enjoying the most upward revision pressure include Energy, Technology, Basic Materials, and Utilities. That positive revision momentum is providing a fundamental counterweight to geopolitical risk.

Notably, it is one of the most underappreciated dynamics keeping institutional buyers engaged above 7,000.

Heading into next week, the market needs one of two things to break out of consolidation: either a substantive development in U.S.-Iran negotiations that credibly reopens the Strait of Hormuz, or continued earnings beats that push full-year EPS estimates high enough to justify current valuations.

The forward P/E has retraced to roughly 20.4x, above the 10-year average of 18.9x but well below the 22x peak from December. That’s not cheap, but it’s defensible if earnings continue growing at double-digit rates.

Patience remains a position, but the bull case is more durable today than it appeared six weeks ago.

The S&P500 closed Friday at a fresh all-time high of 7,165, up 0.80% on the session and extending the index’s remarkable run off the March lows. 

The week, however, was anything but smooth. Thursday’s session delivered a gut-check: reports of air defense systems activating over Tehran sent WTI past US$106, and the S&P dropped -0.41% as the oil-volatility transmission mechanism briefly reasserted itself.

Friday’s recovery came on Intel’s blowout earnings (up 21%), Trump’s three-week extension of the Israel-Lebanon ceasefire, and crude pulling back to US$94. The VIX settled at 18.92, below our 20 thresholds, but Thursday’s spike was a reminder of how quickly that can change.

The technical picture remains unambiguously bullish across all time frames. Investing.com shows 12 of 12 moving average signals at “Strong Buy.” The 14-day RSI is near 70, indicating an overbought condition.

The MACD, a measure of momentum, is on a “buy signal” and rising. The index is trading above the 50-DMA (around 6,790) and above the 200-DMA (around 6,705), both of which are rising.

Breadth has held with roughly 52% of constituents above their 50-DMA, but needs to strengthen if the rally is going to continue. The tension in this tape lies between technical strength and fundamental fragility.

As noted below, the Michigan consumer sentiment printed its lowest reading on record. Furthermore, the Iran peace talks have stalled, with Thursday’s Tehran episode a stark reminder the geopolitical risk premium hasn’t fully unwound.

Oil’s US$94 price represents the kind of volatility that whipsaws systematic strategies and undermines the VIX’s descent. The Fed remains on hold at 3.5–3.75% with markets pricing no cuts in 2026.

At BofA’s target zone of 7,168–7,206, now just 0.4–1.0% overhead, the index is approaching a natural ceiling where profit-taking is likely.

For now, the market continues to climb a wall of worry, and the technicals say respect the trend. RSI is elevated but not grossly overbought, and while breadth is improving, all moving averages remain green.

Our March 200-DMA analysis continues to play out textbook. But Thursday’s reversal on the Tehran headlines was a shot across the bow; this market remains one oil headline away from a -2 to –3% air pocket.

The pullback we flagged last week hasn’t materialized so far, which is making the setup increasingly stretched.

New money should wait for a retest of 7,000 or the 50-DMA (circa 6,979). Stay long but trail stops and take partial profits into BofA’s 7,168–7,206 target.

Trade accordingly.

Corporate news in Australia

-IFM investors is expected to bid $4.75 for Atlas Arteria ((ALX)) and will increase to $5.10 if its shareholding reaches 45%

-Critical Metals Group ((CMG)) is rumoured to want to merge with European Lithium ((EUR)) 

-Eli Lilly has refused to list Mounjaro on the Pharmaceutical Benefits Scheme (PBS) as the price is considered too low

-BHP Group ((BHP)) has agreed to a deal with China’s state-backed iron ore buyer to use a yuan-based spot index price for some sales

-The Western Australian Supreme Court will decide on the validity of a fee, in terms of a new levy for Onslow, that could cost Mineral Resources ((MIN)) millions of dollars

-Woolworths Group ((WOW)) admits some specials are not in the “spirit” of ACCC guidelines

On the calendar today:

-CH March industrial Prod’n

-XX NZ, Australia (NSW) Public Hol

-BEACH ENERGY LIMITED ((BPT)) Qtrly Update

-NICKEL INDUSTRIES LIMITED ((NIC)) Qtr Update

-ST. BARBARA LIMITED ((SBM)) Qtrly Update

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

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