The fourth-quarter earnings season picks up speed in the coming week, unperturbed by new leadership in Washington that could roil markets for weeks to come.
Wall Street initially rallied upon Donald Trump's unexpected win in November. However, goodwill evaporated in recent days as uncertainty grew over what changes to trade and foreign policy a Trump administration could bring. Markets are also notoriously fickle, often trading higher in the lead-up to big events and selling off on their reality.
The coming week, the first under Trump's leadership, should shed a little light on what markets can expect going forward. Trump and Republican officials have suggested that the repeal of the Affordable Care Act is high on the agenda, while Wilbur Ross, Trump's nominee for commerce secretary, has indicated the reopening of the North American Free Trade Agreement is also a top priority.
"A focus on rules of origin and dispute-settlement panels rather than punitive tariffs would be viewed positively, while greater detail on infrastructure spending and corporate tax reform plans would reinforce market sentiment as well," TD Securities analysts wrote in a note.
It's full-steam ahead for earnings with a major chunk of S&P 500 companies set to report on their recent quarters. So far, just 12% of S&P 500 companies have reported earnings and nearly 65% have beat profit estimates.
"Earnings are the catalyst needed to drive stock prices higher in the short term," Jeff Kravetz at U.S. Bank's Private Client Reserve told TheStreet. "E-commerce, technology and energy firms should do well in the upcoming earnings releases as we have turned the corner on the earnings recession with consumers and businesses showing higher levels of optimism on the incoming administration."
Average earnings for the S&P 500 in the fourth quarter are expected to increase 6.3% from the same period a year earlier, according to Thomson Reuters, as energy companies benefit from rising crude oil prices. Energy had been the biggest contributor to an earnings recession that lasted from the middle of 2015 to mid-2016. The recession was the longest since the financial crisis.
In tech earnings in the coming week, Yahoo! (YHOO) will report on Monday; Alibaba (BABA) - Get Alibaba Group Holding Ltd. Report , Seagate (STX) - Get Seagate Technology Holdings PLC Report , Texas Instruments (TXN) - Get Texas Instruments Incorporated Report and Verizon (VZ) - Get Verizon Communications Inc. Report on Tuesday; AT&T (T) - Get AT&T Inc. Report , Citrix Systems (CTXS) - Get Citrix Systems, Inc. Report , eBay (EBAY) - Get eBay Inc. Report , Qualcomm (QCOM) - Get Qualcomm Inc Report and Western Digital (WDC) - Get Western Digital Corporation Report on Wednesday; and Alphabet (GOOGL) - Get Alphabet Inc. Class A Report , Microsoft (MSFT) - Get Microsoft Corporation Report , Intel (INTC) - Get Intel Corporation Report , PayPal (PYPL) - Get PayPal Holdings, Inc. Report and VMWare (VMW) - Get VMware, Inc. Class A Report on Thursday.
In consumer and health earnings, McDonald's (MCD) - Get McDonald's Corporation Report will report on Monday; Johnson & Johnson (JNJ) - Get Johnson & Johnson Report and Kimberly-Clark (KMB) - Get Kimberly-Clark Corporation Report on Tuesday; Bristol-Myers (BMY) - Get Bristol-Myers Squibb Company Report , Biogen (BIIB) - Get Biogen Inc. Report , Celgene (CELG) - Get Celgene Corporation Report , JetBlue (JBLU) - Get JetBlue Airways Corporation Report , Southwest (LUV) - Get Southwest Airlines Co. Report and Starbucks (SBUX) - Get Starbucks Corporation Report on Thursday; and AbbVie (ABBV) - Get AbbVie, Inc. Report and Colgate-Palmolive (CL) - Get Colgate-Palmolive Company Report on Friday.
Other earnings in the coming week include Halliburton (HAL) - Get Halliburton Company Report on Monday; 3M (MMM) - Get 3M Company Report , Alcoa (AA) - Get Alcoa Corporation Report , D.R. Horton (DHI) - Get D.R. Horton, Inc. Report , DuPont (DD) - Get DuPont de Nemours, Inc. Report and Lockheed Martin (LMT) - Get Lockheed Martin Corporation Report on Tuesday; Boeing (BA) - Get Boeing Company Report and Hess (HES) - Get Hess Corporation Report on Wednesday; Baker Hughes (BHI) , Blackstone (BX) - Get Blackstone Inc. Report , Dover (DOV) - Get Dover Corporation Report , Dow Chemical (DOW) - Get Dow, Inc. Report , Ford (F) - Get Ford Motor Company Report , Stanley, Black & Decker (SWK) - Get Stanley Black & Decker, Inc. Report and Unilever (UL) - Get Unilever Plc Report on Thursday; and Chevron (CVX) - Get Chevron Corporation Report and Honeywell (HON) - Get Honeywell International Inc. Report on Friday.
On the economic calendar in the coming week, existing home sales for December will be released on Tuesday; international trade and new home sales for December on Thursday; and durable goods orders for December and the final reading on consumer sentiment for January on Friday.