Michael Hewson's Preview for Week May 4th, 2026:  Oil price pushing, HSBC reports Uber and Disney shares...

The week ahead – 4th May 2026

US markets have continued to flirt with record new highs these past few days, despite oil price pushing up to their highest levels since 2022.

Increased spending on AI by the big US tech companies appears to be helping to drive valuations higher, while at the same time aiding a Q1 rebound in the US economy, which showed the economy grew by 2% on an annualised basis in data released last week.

At the most recent count the likes of Alphabet, Amazon, Meta and Microsoft are looking to spend almost $700bn in capex in building out their AI infrastructure, and which in turn is helping US equity markets to outperform their European counterparts.

This extra spending does appear to have some conditions attached to it, with the perception that Amazon and Alphabet can afford it with the shares of both reaching new record highs, while the likes of Meta and Microsoft are getting punished on concern that it might take longer for them to monetise the huge sums getting invested.

As we look ahead to the new trading week the focus remains on the US, and the latest jobs report for April, and a US labour market which continues to show resilience, justifying the decision last week by the US Federal Reserve to keep rates on hold.

We’ll also get some major earnings announcements from the likes of HSBC, Disney and Uber.

US non-farm payrolls (Apr) – 08/05

Having seen payrolls growth go negative in February to the tune of 133k, we saw a strong rebound in March of 178k, prompted by a reversal of some of the factors that acted as a drag in February.

The January number also saw a revision up to 160k thus serving to paint a rather erratic overview of how the US labour market has performed since the start of the year.

While the BLS labour statistics have proved to be rather erratic the same cannot be said for the ADP jobs report which has been shown to be much less volatile, seeing growth for every month since November last year. Since December we’ve seen gains of 41k, 11k, 66k and 62k.

Weekly jobless claims have also remained relatively low, averaging consistently below 220k since 7th February this year, and falling to 189k, their lowest levels since 1969 at the end of April.

What this tells us about the US labour market ?
It still appears to be relatively tight, with the unemployment rate at 4.3%, although participation has seen a sharp fall since the end of last year from 62.4% to 61.9% the lowest level since November 2021.

This suggests that some looseness may well be starting to creep in, even with a US economy that managed to see a rebound in annualised growth of 2% in Q1. 

HSBC Q1 26 – 05/05

When HSBC reported its full year results at the end of February the shares jumped to new record highs despite a 7% decrease in annual profits of $29.9bn. Profits after tax were down $1.9bn to $23.1bn.

This decline was mainly due to impairment charges in relation to the recent Bank of Communications purchase.

Full year revenues rose by 4% to $68.3bn, while declaring an interim dividend of 45c a share.

Net interest margin rose by 3bps to 1.59%, while credit impairments also edged higher due to concerns over Hong Kong and mainland China real estate.

All that aside the various businesses saw solid profits growth, with Corporate and Institutional Banking reporting a 38% rise to $11.4bn, with strong performances from the Hong Kong and UK businesses.

The UK saw a 22.4% increase to $6.7bn, while HK returned $9.6bn, a 32% improvement. The bank also upgraded its ROTE outlook for 2026, 2027 and 2028 to over 17%, with 5% revenue growth out to 2028.

In respect of 2026 the bank says it expects banking NII of $45bn, a modest rise from 2025’s $44.1bn, and ECL charges of around 40bps.

Since then, we’ve seen a modest decline on the back of the increase in tensions in the Middle East, however since finding a modest base in March the shares have rallied, although we remain short of the peaks seen at the end of February.

Disney Q2 26 – 06/05

Disney shares plunged in the wake of a fairly robust set of Q1 numbers which saw the company post a 5% increase in revenues of $25.98bn, and profits of $1.63 a share, or $3.69bn.

The entertainment division posted a 7% increase in revenue of $11.61bn, while experiences contributed $10bn, an increase of 6%.
Operating income, on the other hand, saw a 9% decline due to higher costs, as well as a decline in advertising revenue.
Zootopia 2 was the stand out winner at the box office, doing particularly well in China. Domestic parks and experiences also posted a record quarter with growth of 8%, while sports saw a sharp decline in operating income to $191m.

The sell off appears to have been driven by guidance for Q2 which was on the soft side, particularly with respect to parks and experiences with management expecting softer visitor numbers due to lower international visitors.
These concerns don’t appear to have gone away since then with the shares falling to 10-month lows at the end of March.
While some of that is undoubtedly down to the sharp rise in gasoline prices due to events in the Middle East, there’s also concern that a fall in international visitors won’t help it either.
There is also the added fact that with World Cup due to take place in the summer there is a wider concern that the sharp rise in airfares to the US, may well deter the usual stream of holidaymakers who would normally make the trip to the US.  

The streaming business appears to be on steadier ground with an expectation of $500m in Q2 operating income, up from $300m a year ago.

Uber Q1 26 – 06/05

Uber shares took a dump in the aftermath of their Q4 numbers, despite a 22% increase in bookings and trips taken.

Gross bookings increased to $54.1bn, helping to boost revenues by 20% to $14.4bn. Free cash flow also improved, increasing by 65% to $2.8bn.

On an annual basis revenues pushed up to a record $52bn, an increase of 18%, with net income rising to $5.2bn, an increase of 32%.

On guidance the ride sharing firm was upbeat, projecting gross bookings of $52bn to $53.5bn, an increase of 20%, however there seems to be some concern that where they are strongest in terms of market share, that they are susceptible to losing market share to the growth in autonomous vehicles like Waymo.

While some of these concerns may well be justified there’s also the possibility, they are overstated with the shares finding some support just below $69.

Call me old-fashioned but I prefer a person behind the wheel, and while there is a growing market for AI autonomous vehicles it may take longer than people think to start taking huge chunks out of Uber’s market.