Markets climb as risks ease and earnings deliver

Hi everyone and welcome to Market Week in Review for the week of April 17th, 2026. My name is Bay Chan Lin. I'm a director and head of Canadian investment strategy here at Russell Investments. Today we have three items on the agenda. First, the S&P 500 hit an overall time high. Next, we'll look at the US earnings releases. And finally, we'll wrap up with a discussion of Chinese macroeconomic data. So, let's get started. Although talks between the US and Iran over the weekend failed to produce a new agreement, investors appear to nevertheless be encouraged that talks were taking place between the two countries, and they appeared hopeful that more negotiations between these two countries might potentially take place. For now, the temporary ceasefire that was announced between the US and Iran appears to still be holding up. Even though geopolitical uncertainty remains elevated, energy prices have come down from their peak with crude oil trading at about $90 a barrel in WTI terms. This is still higher than where crude oil prices were before the start of the conflict, but lower than levels which we think could dent economic growth for the US. Now, in terms of the momentum in the S&P 500 this week, it was primarily concentrated in certain areas. So, two key examples. The first is some of these large mega-cap tech companies. As investors continue to contemplate what new developments in artificial intelligence mean for some of these companies. And the second area where we saw positive market momentum this week was in some of the large managers of private credit funds. Now, private credit, some of you might know, has been in the media a lot these past couple weeks. And in the past few weeks, private credit managers have actually seen significant sell-offs in their stock prices. But, this week we actually did see a rebound in some of the private credit managers as investors were likely buying the dip of some of these private credit managers. Now, from our perspective at Russell Investments, we think that a lot of the headlines that you may have seen about private credit in recent weeks tend to be a little bit more idiosyncratic. They're less reflective of underlying credit issues, and they're probably more reflective of some of the challenges that funds face when they try to match the illiquid structure of private credit investments with the liquid or semi-liquid structure that retail investors are seeking in their investment landscape. For more information on the private credit developments, I'd encourage you to take a look at the article that my colleague Keith Brakebill wrote recently on the private credit landscape. Now, when we look at the markets outside of the US, those stock markets have not yet hit all-time highs, but nevertheless, those stock markets are also fairly close to their all-time highs as well. Next, let's talk about the US earnings season, and we're still early days, but we did have some of the large banks report their Q1 results. And generally speaking, we saw some of these banks continue to announce beats to earnings expectations. However, a lot of these beats in earnings expectations were concentrated a little bit more on the deal generation and trading side, rather than necessarily on the net interest income side. Now, when we take a look at expectations for Q1 2026 earnings season as a whole, generally the industry consensus expects earnings growth of around 15%. This is one of the highest initial start of quarter earnings growth estimates we've seen in recent quarters, but when we compare this pace of earnings growth to the pace of realized earnings growth that we saw in the past few quarters, it's actually fair fairly in line. And so, it is possible that these companies could still achieve this level of strong earnings growth that is being forecasted. And if that's the case, that would be an encouraging sign for the US economy as it would potentially help to keep the wave of layoffs low. Finally, let's wrap up with a recap of Chinese macroeconomic data. This week we got several data points ranging from credit data to GDP data to retail sales data. Broadly speaking, when we look at the Chinese economic data, it was encouraging to see that GDP growth in the first quarter accelerated to 5%. Nevertheless, there are still some macroeconomic challenges facing the Chinese economy. We're seeing weak retail sales data, and property prices are still declining year-over-year. Ultimately, we expect that the Chinese government will need to do more to be able to hit their GDP growth target for 2026. Nevertheless, when we look at valuations of Chinese equities, we do think that they're more compelling than the valuations of US equities. And so, we continue to believe that diversifying across regions has its benefits. Thanks so much for everyone for tuning into Market Week in Review. For our US audience, hopefully you got your tax returns in on time. And for our Canadian audience, remember your tax returns are due soon. We'll see you next time. Hi, I'm Sophie Antelme-Berck, Head of Portfolio and Business Consulting at Russell Investments. If you liked what you just saw and heard, consider subscribing to our YouTube channel or check us out on LinkedIn. Thanks for tuning in.