Michael Hewson's weekly Preview for iFOREX traders 16th - 20th of April, 2026: New record highs in US markets due to ceasefire

Despite the backdrop of a fragile Middle East ceasefire US markets have not only recovered all of their recent losses, but have gone on to make new record highs this week.

This week’s boost in sentiment appears to be being driven by combination of optimism that   us when it comes to surging energy prices, but also solid earnings numbers, with US banks delivering ahead of expectations due to strong investment banking results.

That said the fear of a fresh flare up is never too far away despite the retreat in both crude oil and natural gas prices, and the reality is that even if there were no further flare ups the global economy is still faced with the prospect of much higher base line inflation due to the supply chain disruptions that are still yet to be full felt. 

This week we look ahead to the latest Q1 numbers from Tesla and Boeing, with Tesla share price enjoying a modest uplift in recent days in the hope that rising gasoline prices will fuel a rebound in EV sales.

As far Boeing, we’ll be looking to see when its various divisions are heading in the right direction when it comes to returning to profit.

We’ve also got a raft of economic announcements out of the UK at a time when the UK, along with Italy and France are being described as the new whipping boys of the bond market, The new PiiGs or the BIF’s as they’ve been described in the Financial Times this week.

Tesla 16 – 20/04

Tesla shares have slid sharply from their end of year peaks, although we’ve seen a modest rebound in the last few days, with their end of year numbers in January showing a 3% decline in Q4 total revenues to $24.9bn.

Of that total automotive revenues fell 11% to $17.69bn largely due to the pull forward effect into Q3 of the expiring $7,500 tax break in September. Operating expenses were also higher, rising by 39% to $3.6bn.

Operating margins were also lower at 5.7%, down 50bps from the same period a year ago. Net income also fell sharply down 61% to $840m. In the full year, total automotive revenues were down by 10% to $69.25bn, the lowest since 2021, while total deliveries fell to 1.6bn, down from 1.68bn in 2024.

The annual decline in total revenue was more modest, down by 3% to $94.83bn. On the plus side the company’s free cash flow was solid, rising 74% to $6.22bn, and the highest since 2022. In all other areas of the business there was solid growth with a 29% increase in storage deployed, while supercharger and stations and connectors also saw double digit growth of close to 20%.

Revenue here rose 25% to $3.84bn.

On the call after the Q4 results, Musk said that the Model S and X programs would be discontinued and wound down and given over to Optimus robot production.

These models make up a very small part of the production line where Model 3/Y made up 422,652 in Q4, out of a total of 434,358. For Q1 we already know that deliveries have continued to slow, coming in short of expectations at 358k, a fall of 14% on the previous quarter, although they were higher than a year ago. Once again, the Model 3 and Y contributed the bulk of the total.

The energy business appears to be a bigger concern, seeing a big drop in gigawatt hours to 8.8, a sharp fall in the 14.2GWH in Q4. It was also a significant decline on last year’s 10.8GWH. Hopefully the upcoming Q1 earnings will shed some light as to why there was a decline in this area with the shares down at their lowest levels since September last year.  

Boeing Q1 26 – 22/04

Boeing’s share price briefly hit 2-year highs in the aftermath of their full year results before undergoing a decline which saw the shares hit their lowest level in 3-months at the end of March.

We’ve seen a modest recovery since then with the jury still out on whether this US stalwart can restore confidence in a business model which has taken an absolute shellacking over the past few years. Its Q4 numbers saw the business post a 57% increase in revenue to $23.9bn, with profits coming in at $8.22bn, although this was helped by a $9.6bn gain on the sale associated with closing the Digital Aviation Solutions transaction.

Its various segments are still running at a loss albeit at lower levels than a year ago. Commercial Airplanes operating loss was -$632m, while Defence, Space and Security posted an operating loss of -$507m.

Free cash flow saw a big improvement, coming in at $375m, with CEO Kelly Ortberg saying that he expects this to improve to between $1bn and $3bn in 2026.

During the quarter the 737 program increased its production rate to 42 per month and received approval from the FAA to begin the final phase of 737-10 certification flight testing.

The production of the 787 has started to transition to 8 per month, and hopes to stabilise at that rate. In 2025 the company delivered 600 aircraft, the highest number since 2018, and up from 348 in 2024, while annual revenues jumped to $89.46bn, up from $66.52bn the year before. Order backlogs also rose, coming in at a record $682bn.

UK Unemployment (Feb)/UK CPI (Mar) – 21/04 and 22/04

– with unemployment already at a 5 year high of 5.2%, and many employers reluctant to hire the labour market outlook for the UK economy was already looking dark even before events in the Middle East, despite the strong start to the year in the recent GDP data.

The recent changes to the minimum wage thresholds are having a particularly toxic effect on younger workers with unemployment here north of 15% and rising.

This reluctance to hire particularly in the private sector is helping to slow wage growth down to 3.3% the lowest level since late 2020, however public sector wages have remained much higher, although they also slowed to 5.9%.

On the plus side the economy has been stronger than expected in the first couple of months this year, along with some growth in payrolls which saw the first increase in several months.

Nonetheless the outlook still remains bleak, and with inflation set to surge sharply in March, the Bank of England’s job has only become more difficult. Much as they may want to cut rates to help the economy, the surge in inflation since war broke out in the Middle East means that we may well have seen the low point as far as the current inflationary cycle is concerned, having settled at 3% in February. That doesn’t necessarily mean we can expect to see rate hikes, but that hasn’t stopped the market starting to price them in, with significant consequences for mortgage rates.

The bigger question is what happens with inflation in March, and for that we only have to look at the recent numbers out of the US and Europe, which have seen headline CPI surge by as much as 0.9% in the US and 0.6% in the EU.

This means we could well see headline inflation head back to the levels we saw last summer at 3.8% in fairly short order.

That isn’t rate cutting territory by any stretch of the imagination, and while we’ve seen the energy price cap fall in April, goodness only knows what we’ll see in July when the price cap gets raised.to reflect the current surge in gas prices.