Brace yourselves. This week, there are no
headlines to monitor, no news on the
, and no
meeting (that'll be a concern going into next weekend, though).
However, there are so many earnings reports in the coming week that they overshadow everything else. Robert Pavlik, chief market strategist at Banyan Partners, sums the week up best. "There are a
of earnings reports. It really kicks in."
Oh yes, it's first-quarter earnings season, and the worst of the storm is about to slam into the market like a nor'easter approaching Cape Cod in November. John Butters, research analyst with Thomson Reuters, said that 140 constituents of the
are due to report earnings over the next five sessions.
With so many S&P 500 members set to report next week, only one thing is for sure: The coming week is the one of the busiest this quarter.
Butters has some pretty grim statistics for how this quarter is shaping up. In the fourth quarter, 59% of S&P 500 companies beat estimates, 8% matched and a whopping 34% came in below targets. That compares to the long-term average, where 61% meet expectations, 19% match and 21% miss estimates.
Although only 10% of the S&P constituents have reported, it looks like a near repeat of the last quarter. So far, 62% of the companies that have reported have beat expectations, 6% have matched and 33% have come in below. But as Butters pointed out, you can't put too much stock in those numbers.
What's scarier are the expectations for this quarter's growth rate. The fourth quarter had a negative growth rate of 67%, the weakest number since Thomson Reuters started tracking the data a decade ago. The blended growth rate for the first quarter, which combines reported results for the 10% of companies with expectations for the other 90%, is negative 37.4%.
If there's any solace investors can take in that blended number, it's that it hasn't gone down in the last week thanks to several positive earnings reports out of the financial sector, like
"That number has actually held up, believe it or not," Butters said. "This is the first week where that growth rate actually hasn't gone down. From the start of the quarter, that growth rate has dropped every week."
While financial sector earnings were the focus of last week, plenty of other sectors will be well-represented in the coming week. Sure,
Bank of America
is set to report Monday, but so are
, among others.
are among the featured reports due following Monday's close.
"It's hard to extrapolate the results of the financials to the other blue chip companies that are out there," Pavlik said. "You have earnings across the board. The only thing you can take away from the earnings beats by financials is that maybe the estimates have been taken down low enough to set the bar low enough."
Tuesday morning will see results from several key names, including
Bank of New York Mellon
New York Times
are due to report early Tuesday.
After Tuesday's close,
Advanced Micro Devices
, among others, will report quarterly results.
Wednesday is another busy day, with Dow components
set to report early.
will also report Wednesday morning.
, along with
will report late in the day.
The earnings stream doesn't slow Thursday, as reports from
will be closely watched in the morning.
will headline the after-hours reports.
Friday's earnings wire is considerably lighter, with
the key reports to watch.
Plenty of Economic Data, Too
Earnings reports will be the big draw next week, but several key economic reports are also set to land. Monday will bring the latest read on leading economic indicators for March, and Thursday will bring the weekly jobless claims report. Last week's initial jobless claims came in better than expected at 610,000, but continued claims jumped to a record 6.02 million.
Perhaps more importantly, the March report on durable goods orders will be released at 8:30 a.m. EDT Thursday morning. Thursday will see the release of the March read on existing-home sales, and Friday will bring new home sales data for last month, all of which are considered to be strong barometers of economic activity. If there's any good news in the reports, traders will no doubt cheer it.
Fed Vice Chairman Donald Kohn will be speaking this week, and his comments may be worth monitoring. On Saturday, Kohn will speak about the Fed's monetary policy in the financial crisis at Vanderbilt University. On Monday, Kohn will give his economic outlook at the University of Delaware.
With the earnings load expected to be heavy this coming week and the one after, investors will continue to be bombarded with a lots of reports. However, Pavlik warns that the
results from banks will quickly sneak up on investors if their focus stays solely on earnings.
The U.S. government said it will release the details of stress tests performed on the country's 19 largest banks in two stages. April 24 will bring an outline of how the government conducted the tests and other information. May 4 will bring the release of selected results of the tests themselves, although officials are unsure how much information they will make public.
"I think the stress tests will be the big news next," said Pavlik. "However, no bank is going to fail the test. The government is not going to allow anyone to fail. They'll just tell them how much capital needs to be raised."