First-quarter earnings will take a backseat to the Federal Reserve in the coming week.
The central bank will meet on Tuesday with an announcement set for Wednesday afternoon and while the chances of an interest rate hike are slim, investors will be keen to gauge how willing members are to move at the next meeting in June.
"While we assign a low probability of a rate hike, sentiment may be impacted by Fed comments about the strength of economic health and implied likelihood of a June rate hike," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
Fed funds futures only price in a rate hike with odds greater than 50% in November, nearly a year after December 2015's initial liftoff, according to CME Group. The chance of an April rate hike is currently priced in at 2%, while a June hike has an 17% probability. September has a 47% chance.
The majority of analysts expect Fed Chair Janet Yellen and fellow Federal Open Market Committee members to stay their hand this month on continued headwinds buffeting the U.S. economy. Language in the Fed's announcement is expected to parrot recent releases, emphasizing data dependence but indicating that the trends continue to move towards the Fed's target.
"We expect little change in the Fed's policy stance at this meeting, which will neither signal an approaching hike, nor be intended to preclude one," Morgan Stanley analysts wrote in a note. "Should the outcome of the April FOMC meet our expectations, markets are likely to nudge the probability of a June rate hike higher -- closer to one-in three but below one-in-two."
Earnings continue to come in at breakneck speed in week three of the season. Nearly one-third of S&P 500 companies already have reported earnings so far this season with 77% beating analysts' estimates, above the average success rate of 63%.
While companies may be beating estimates, expectations were low heading into the quarter. A stronger U.S. dollar, weaker global demand and a prolonged period of lower commodity prices kept investors bearish. S&P 500 companies are expected to report a 7.1% slide in average earnings in the first quarter, the fourth straight quarter of declines and the worst losing streak since the Great Recession.
In the energy sector, Halliburton(HAL) - Get Report will report Monday morning; BakerHughes (BHI) and Hess(HES) - Get Report on Wednesday morning; ConocoPhillips(COP) - Get Report on Thursday morning; and Chevron(CVX) - Get Report , Exxon Mobil(XOM) - Get Report and Phillips 66(PSX) - Get Report on Friday.
Prepare for an avalanche of tech earnings with Xerox(XRX) - Get Report on Monday morning; AT&T(T) - Get Report , CirrusLogic(CRUS) - Get Report , eBay(EBAY) - Get Report and Twitter(TWTR) - Get Report on Tuesday afternoon; Facebook(FB) - Get Report , Garmin(GRMN) - Get Report and PayPal(PYPL) - Get Report on Wednesday; and Amazon(AMZN) - Get Report , Baidu(BIDU) - Get Report , Expedia(EXPE) - Get Report , Groupon(GRPN) - Get Report and LinkedIn (LNKD) on Thursday.
Apple(AAPL) - Get Report moved its earnings release a day later than planned in the coming week to avoid reporting on the day of a memorial service for Silicon Valley business leader Bill Campbell, a mentor to many tech leaders. Apple will now report on Tuesday "out of respect" for Campbell's friends and family.
Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
Consumer stocks, both cyclical and non-cyclical, will get their chance to shine. Buffalo Wild Wings (BWLD) , Chipotle(CMG) - Get Report , Office Depot(ODP) - Get Report and Panera Bread (PNRA) will report on Tuesday; Mondelez(MDLZ) - Get Report is set for Wednesday; and Colgate-Palmolive(CL) - Get Report and Dunkin' Brands(DNKN) - Get Report are scheduled for Thursday.
Panera Bread is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
Other earnings of note include automakers Fiat Chrysler(FCAU) - Get Report and Ford(F) - Get Report on Tuesday and Thursday, respectively; Eli Lilly(LLY) - Get Report , Procter& Gamble(PG) - Get Report , DuPont(DD) - Get Report and Lockheed Martin (LMT) - Get Report on Tuesday; Boeing(BA) - Get Report , United Technologies(UTX) - Get Report , Barclays(BCS) - Get Report and Comcast(CMCSA) - Get Report on Wednesday; and AbbVie(ABBV) - Get Report , Bristol-Myers(BMY) - Get Report , Celgene(CELG) - Get Report , Gilead Sciences(GILD) - Get Report , MasterCard(MA) - Get Report , UPS(UPS) - Get Report , Viacom(VIAB) - Get Report , Time Warner Cable (TWC) , Dow Chemical(DOW) - Get Report and Virgin America (VA) Thursday.
The housing sector will go under the microscope again in the coming week with new home sales and pending home sales for March out on Monday and Wednesday, respectively. The Case-Shiller 20-city index for February will be released on Tuesday.
"The outlook for housing is a mixed bag," Deutsche Bank analysts wrote in a note. "Healthy household balance sheets, strong job growth, easing lending standards and the relatively low share of housing in output suggest that the sector could be ready for a strong expansion. On the flip side, recent signs that demand could be slowing, despite the blatant inadequacy of the housing recovery, bear watching."
Economists expect meager 0.7% growth in the U.S. economy in the first quarter after a respectable 1.4% rise in the fourth quarter. The first estimate of first-quarter GDP will be released on Thursday. Economists anticipate factors including weaker manufacturing, a stronger U.S. dollar, softer global demand and volatile market activity will eat into U.S. GDP for the start of the year.
Also on the economic calendar are durable goods orders for March, out Tuesday, and personal income and outlays for March on Friday.