Wall Street will have a new distraction from the unpredictable daily whims of crude oil prices in the coming week as first-quarter earnings season begins.
The reporting season will kick off in earnest on Monday afternoon when unofficial bell-ringer Alcoa (AA) - Get Report reports after the close of trading. Uncertainty over how major companies fared over the quarter kept bulls on the sidelines and pushed bears to sell.
"As we start to kick into earnings season there's going to be anxiety," Matt Kaufler, portfolio manager at Federated Investors, told TheStreet. "There's a general skepticism that [earnings] are perhaps steady but they'll be unenthusiastic. Steady but uninspiring."
The early prognosis on companies' quarterly performances doesn't look good. S&P 500 earnings are expected to fall 7.9% in the first quarter, their third straight quarter in decline and their worst losing streak since mid-2009. Excluding the energy sector, earnings are forecast to fall 3.6%. Only three S&P 500 sectors are expected to have positive earnings growth: consumer discretionary, telecommunications, and health care.
Major banks will kick off their reporting season with JPMorgan (JPM) - Get Report on Wednesday morning. Bank of America (BAC) - Get Report , BlackRock (BLK) - Get Report, PNC Financial (PNC) - Get Report and WellsFargo (WFC) - Get Report will report on Thursday morning, while Citigroup (C) - Get Report is scheduled for Friday.
Other key earnings reports next week include Fastenal (FAST) - Get Report and Perry Ellis (PERY) - Get Report on Tuesday morning, railroad operator CSX (CSX) - Get Report on Tuesday afternoon, homewares retailer Pier1 Imports (PIR) - Get Report on Wednesday afternoon, and Delta Air Lines (DAL) - Get Report on Thursday morning.
A number of Federal Reserve speeches in the coming week will add to the chorus of doves touting a gradual path to rate hikes and hawks saying an April hike remains on the table.
"There is a growing divergence among Fed officials over the appropriate pathway for rates," Lindsey Piegza, chief economist at Stifel, wrote in a note. "While a rate hike just three weeks from now is unlikely, the fact that Committee members were openly discussing the possibility serves to increase the probability of a rate hike near-term, potentially as early as the June FOMC meeting, just over 10 weeks from now."
Dallas Fed President Rob Kaplan will join a moderated question-and-answer session in Louisiana on Monday afternoon, while San Francisco Fed President John Williams and Richmond Fed President Jeffrey Lacker will deliver speeches on Tuesday in San Francisco and Wilmington, N.C., respectively.
On Thursday, Atlanta Fed President Dennis Lockhart will deliver remarks on the Fed's perspective on the economy in Chicago, while Federal Reserve Gov. Jerome Powell will testify on trends and changes in fixed-income markets to the Senate Banking Subcommittee in Washington.
Chicago Fed President Charles Evans will cap off the week with a speech to the JPMorgan Investor Seminar in Washington on Friday.
Fed funds futures still indicate that only one hike this year -- in September -- has odds greater than 50%, according to CME Group. An April rate hike is currently priced in at 3%, while a June hike has an 18% probability. An April rate hike had a 5% chance at the beginning of the week.
The Fed's Beige Book, out on Wednesday afternoon, will deliver a series of anecdotes on the economic health of the central bank's 12 districts. The report is usually delivered two weeks before the next monetary policy meetings and is used as an on-the-ground perspective as to conditions in different economic pockets across the U.S.
The consumer will be on watch with March retail sales out on Wednesday morning and an initial reading on consumer sentiment for April out on Friday. Consumer spending accounts for more than two-thirds of the economy. Retail sales fell 0.1% in February with lower gas prices proving the main headwind to growth.
Inflation is expected to remain under pressure when March producer and consumer prices are released next week. Producer prices, out Wednesday morning, are expected to inch 0.3% higher in March or just 0.1% excluding volatile items such as energy. Consumer prices, scheduled for Thursday, are expected to climb 0.2% in March.
Also on the economic calendar, investors will get a snapshot of the New York region's economy on Friday with a flash reading of the Empire State Manufacturing Survey for April. A weekly read on unemployment claims will be released as usual on Thursday, while industrial production for March is scheduled for Friday.
Oil should remain a primary driver of markets ahead of the Organization of Petroleum Exporting Countries' April 17 meeting in Doha, Qatar. Investors have hemmed and hawed over whether OPEC members can agree on a production freeze during that meeting.
"Despite the doubts that have recently emerged, the Kuwaiti OPEC governor is still confident that an agreement on production caps will be reached at the meeting of oil producers in Doha on 17 April. Other OPEC delegates have also made similar comments," Commerzbank analysts write in a note. "We are more skeptical in this regard. So far, it is not even clear whether Iran will take part in the meeting at all. The Iranian oil minister has not yet committed to attending, while his deputy is not planning to come to Doha."