Wall Street starts the second week of the quarterly earnings season on Monday, and any report that's better than bad may be cause for rejoicing.
Financial performance for the three months through March is generally expected to be weak, with a strong U.S. dollar, a prolonged period of low energy prices, and weaker global demand putting a dent in profits and revenues in companies across the ten S&P 500 sectors.
"Anytime someone doesn't do as badly as we thought they were going to do, you're seeing these spikes in the market," Tom Siomades, head of Hartford Funds Investment Consulting Group, told TheStreet. "We won't do as badly as people think we're going to do, but let's face it ... the first quarter was highly volatile and then there's expectations that we post a pretty low GDP so that's going to translate into low earnings."
S&P 500 profits are expected to fall 7.8% in the quarter, according to Thomson Reuters, the fourth straight decline and the worst losing streak since mid-2009. Excluding the energy sector, earnings are forecast to fall 2.5%. Around 7% of S&P 500 companies have already reported with just under two-thirds beating earnings estimates.
Tech and telecommunications stocks will be under the microscope this week with IBM (IBM - Get Report) and Netflix(NFLX - Get Report) reporting on Monday afternoon, Intel (INTC - Get Report) and Yahoo! (YHOO - Get Report) scheduled for Tuesday afternoon, Verizon (VZ) set for Thursday morning, and Alphabet (GOOGL - Get Report) andMicrosoft (MSFT) reporting that afternoon.
Morgan Stanley (MS) will report on Monday morning and Goldman Sachs (GS) is due for Tuesday. Those are among the last banking stocks to report this earnings season after JPMorgan (JPM) , Bank of America (BAC) , Wells Fargo(WFC) , and Citigroup (C) released their reports in the past week.
Consumer stocks will get their chance to shine in the coming week: Hasbro (HAS) and PepsiCo (PEP) are due for Monday; Harley-Davidson (HOG) and Phillip Morris (PM) are set for Tuesday; Coca-Cola (KO) , Mattel (MAT) , andYum! Brands (YUM) are slated for Wednesday; General Motors (GM) , Starbucks (SBUX) , and Under Armour (UA)are scheduled for Thursday; and McDonald's (MCD) will report on Friday.
Alphabet, Bank of America, Wells Fargo, PepsiCo, Biogen and Starbucks are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before he buys or sells the stocks? Learn more now.
Among consumer health and drugs stocks, Johnson & Johnson (JNJ) will report on Tuesday, Biogen (BIIB) is due for Thursday, and Kimberly-Clark (KMB) is scheduled for Friday. Manufacturing stocks Caterpillar (CAT) and Honeywell(HON) are set for Friday.
Federal Reserve commentary will quiet down in the coming week with only a few speeches from New York Fed President William Dudley, Minneapolis Fed President Neel Kashkari and Boston Fed President Eric Rosengren set for Monday.
Fed watchers will instead gauge all economic data and news in terms of how it might influence a decision on adjusting interest rates when the central bank's monetary policy committee meets April 26-27.
"The odds of an April move have dropped significantly since the March Federal Open Market Committee statement and press conference suggested the Fed would take its time delivering the next rate hike," BNP Paribas analysts wrote in a note. "The FOMC is right to be cautious and we see the asymmetry of risks favoring a more patient Fed. We think uncertainty, caution and weak data will keep the Fed on hold for the remainder of the year."
Fed funds futures still indicate that only one hike this year -- in December -- has odds greater than 50%, according to CME Group. An April rate hike is currently priced in at a 1% chance, while a June hike has a 12% probability.
The race to the White House will heat up on Tuesday with 291 Democratic delegates and 95 Republican delegates up for grabs in the New York primary. Democratic frontrunner Hillary Clinton and controversial billionaire businessman Donald Trump are expected to win the majority in their respective races.
The housing sector will be evaluated in a number of economic releases: The housing market index from the National Association of Home Builders, out Monday morning, will give an overview of the single-family housing market, expected to tick up to a reading of 59 in April from 58 a month earlier.
The number of new houses under construction will be released on Tuesday morning. Economists expect housing starts to decline by 0.7% in March after a blockbuster 5.2% increase in February. Meanwhile, building permits are expected to increase by 2% after sliding 3.1% in February.
Existing home sales, the focus of a Wednesday morning report, are expected to have rebounded in March after a dire February. Sales of homes already built are expected to have increased 3.7% last month thanks to milder weather after a 7.1% decline a month earlier.
Outside of the housing sector, the economic calendar in the coming week is relatively quiet. The Philadelphia Fed Business Outlook Survey, a snapshot of business conditions in the region, will be released on Thursday morning. A flash reading on the producers' manufacturing index is due for Friday morning.
The outcome of a Sunday meeting between major oil-producing countries will likely determine investor appetite for commodities in the week ahead. The Organization of Petroleum Exporting Countries and non-member Russia will meet in Doha, Qatar, over the weekend to negotiate a potential production freeze. The countries could decide to cap output at current levels, though many remain skeptical that Iran, which only recently had sanctions lifted, will agree to a deal.
By Keris Alison Lahiff
Source:http://www.thestreet.com/story/13532453/1/week-ahead-earnings-season-rolls-on-housing-sector-under-microscope.html
Financial performance for the three months through March is generally expected to be weak, with a strong U.S. dollar, a prolonged period of low energy prices, and weaker global demand putting a dent in profits and revenues in companies across the ten S&P 500 sectors.
"Anytime someone doesn't do as badly as we thought they were going to do, you're seeing these spikes in the market," Tom Siomades, head of Hartford Funds Investment Consulting Group, told TheStreet. "We won't do as badly as people think we're going to do, but let's face it ... the first quarter was highly volatile and then there's expectations that we post a pretty low GDP so that's going to translate into low earnings."
S&P 500 profits are expected to fall 7.8% in the quarter, according to Thomson Reuters, the fourth straight decline and the worst losing streak since mid-2009. Excluding the energy sector, earnings are forecast to fall 2.5%. Around 7% of S&P 500 companies have already reported with just under two-thirds beating earnings estimates.
Tech and telecommunications stocks will be under the microscope this week with IBM (IBM - Get Report) and Netflix(NFLX - Get Report) reporting on Monday afternoon, Intel (INTC - Get Report) and Yahoo! (YHOO - Get Report) scheduled for Tuesday afternoon, Verizon (VZ) set for Thursday morning, and Alphabet (GOOGL - Get Report) andMicrosoft (MSFT) reporting that afternoon.Morgan Stanley (MS) will report on Monday morning and Goldman Sachs (GS) is due for Tuesday. Those are among the last banking stocks to report this earnings season after JPMorgan (JPM) , Bank of America (BAC) , Wells Fargo(WFC) , and Citigroup (C) released their reports in the past week.
Consumer stocks will get their chance to shine in the coming week: Hasbro (HAS) and PepsiCo (PEP) are due for Monday; Harley-Davidson (HOG) and Phillip Morris (PM) are set for Tuesday; Coca-Cola (KO) , Mattel (MAT) , andYum! Brands (YUM) are slated for Wednesday; General Motors (GM) , Starbucks (SBUX) , and Under Armour (UA)are scheduled for Thursday; and McDonald's (MCD) will report on Friday.
Alphabet, Bank of America, Wells Fargo, PepsiCo, Biogen and Starbucks are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before he buys or sells the stocks? Learn more now.
Among consumer health and drugs stocks, Johnson & Johnson (JNJ) will report on Tuesday, Biogen (BIIB) is due for Thursday, and Kimberly-Clark (KMB) is scheduled for Friday. Manufacturing stocks Caterpillar (CAT) and Honeywell(HON) are set for Friday.
Federal Reserve commentary will quiet down in the coming week with only a few speeches from New York Fed President William Dudley, Minneapolis Fed President Neel Kashkari and Boston Fed President Eric Rosengren set for Monday.
Fed watchers will instead gauge all economic data and news in terms of how it might influence a decision on adjusting interest rates when the central bank's monetary policy committee meets April 26-27.
"The odds of an April move have dropped significantly since the March Federal Open Market Committee statement and press conference suggested the Fed would take its time delivering the next rate hike," BNP Paribas analysts wrote in a note. "The FOMC is right to be cautious and we see the asymmetry of risks favoring a more patient Fed. We think uncertainty, caution and weak data will keep the Fed on hold for the remainder of the year."
Fed funds futures still indicate that only one hike this year -- in December -- has odds greater than 50%, according to CME Group. An April rate hike is currently priced in at a 1% chance, while a June hike has a 12% probability.
The race to the White House will heat up on Tuesday with 291 Democratic delegates and 95 Republican delegates up for grabs in the New York primary. Democratic frontrunner Hillary Clinton and controversial billionaire businessman Donald Trump are expected to win the majority in their respective races.
The housing sector will be evaluated in a number of economic releases: The housing market index from the National Association of Home Builders, out Monday morning, will give an overview of the single-family housing market, expected to tick up to a reading of 59 in April from 58 a month earlier.
The number of new houses under construction will be released on Tuesday morning. Economists expect housing starts to decline by 0.7% in March after a blockbuster 5.2% increase in February. Meanwhile, building permits are expected to increase by 2% after sliding 3.1% in February.
Existing home sales, the focus of a Wednesday morning report, are expected to have rebounded in March after a dire February. Sales of homes already built are expected to have increased 3.7% last month thanks to milder weather after a 7.1% decline a month earlier.
Outside of the housing sector, the economic calendar in the coming week is relatively quiet. The Philadelphia Fed Business Outlook Survey, a snapshot of business conditions in the region, will be released on Thursday morning. A flash reading on the producers' manufacturing index is due for Friday morning.
The outcome of a Sunday meeting between major oil-producing countries will likely determine investor appetite for commodities in the week ahead. The Organization of Petroleum Exporting Countries and non-member Russia will meet in Doha, Qatar, over the weekend to negotiate a potential production freeze. The countries could decide to cap output at current levels, though many remain skeptical that Iran, which only recently had sanctions lifted, will agree to a deal.
By Keris Alison Lahiff
Source:http://www.thestreet.com/story/13532453/1/week-ahead-earnings-season-rolls-on-housing-sector-under-microscope.html
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