NEW YORK (
-- Corporate earnings are looking pretty good so far in this relatively young earnings season, and that's raising analyst expectations.
data, with 30% of the S&P 500 having reported their results through Friday, Wall Street is now looking for blended quarterly earnings growth of 15.5% from the companies comprising the broad equity index. The blended growth estimate includes reported results as well as consensus estimates.
That percentage is up from an expectation for 13% growth on April 1, reflecting how well the numbers have come in so far as 75% of the companies reporting have topped the average analysts' view to date. The bullishness is also raising the bar for the second quarter as Wall Street now sees growth of 14.7% for the June-ending period vs. 13.3% as of April 1.
The pace picks up on Tuesday with
due to report.
Ford is slated to deliver its numbers before the open, and the average estimate of analysts polled by
is for a profit of 50 cents a share in the quarter on revenue of $29.7 billion. After beating estimates for four straight quarters, Ford missed badly last time around, so there is some pressure on Alan Mulally & Co.
The expectation is that the impact of the earthquake/tsunami disaster in Japan won't be felt this time around but rather in the next quarter. Still Ford just announced it was suspending work at plants in Taiwan, South Africa and China because of a shortage of parts resulting from the situation in Japan, so Wall Street will want more color on that.
For now, option volatility in Ford is low and the stock is only 10% above last year's peak in April. The company will face rising commodity costs for its factories and a consumer under pressure at the gas pumps, but it seems to be in good shape to weather those headwinds.
Dow component Coca-Cola also reports before the market opens and is expected to have Japanese exposure. However the company could offset some of those problems with positive currency movements and insurance.
Market watchers will also be looking for inflation hits after seeing
guide down because of rising paper and petroleum costs. Coca-Cola could talk about raising prices for consumers.
analyst Erin Smith thinks that the shares are undervalued and could reach $68. She says that combined with the dividend that implies a risk-adjusted total return of 17%.
Another blue chip, 3M is also out in the a.m. The company hosted an analyst day in March giving great detail on its product development and growth goals, but little with regards to updates on the quarter. The company will face difficulties in its raw materials and may have been affected by Japan as well. However, 3M is also doing very well in Latin America and the growth is going to come from emerging markets.
Wall Street is looking for earnings of $1.44 a share on revenue of $6.95 billion from 3M in the quarter, and the stock has risen 6.4% so far in 2011.
is also expected to have be affected by the earthquake, but it remains to be seen as how much. The handbag giant is still focused on China and growing its business in that market.
has a buy rating and has not changed its long-term positive view on the stock.
After the market closes is retail giant Amazon and investors will be watching for squeezed profit margins. Amazon is spending big bucks to get shoppers, so expect the company to tout sales over profits.
The consensus estimate is for earnings of 61 cents a share on revenue of $9.53 billion. If Amazon can't deliver a high enough revenue figure, the market will probably sell off the stock.
Elsewhere the Case-Shiller housing price index is due at 9:00 a.m. ET and the Conference Board's consumer confidence number follows at 10 a.m. ET. The read on how consumers are feeling could get more attention after the index fell 8.6 points to 63.4 in March, erasing two months of improvement.
Wall Street is looking for an increase to 64.4 in April, according to
, but that could be a challenging proposition as Middle East unrest and higher prices for gas and food are beginning to make consumers nervous. Also, a new
New York Times
survey said the number of Americans becoming more pessimistic had risen quite bit.
The Case-Shiller index, which is a read on price trends in 20 cities across the nation, is expected to show an overall decline of 3.2%.
The market was
on Monday, and a disappointing outlook from
over the after-hours session.
And finally, the Federal Open Markets Committee begins a two-day meeting on interest rates on Tuesday. The groundwork to eventually tighten has been laid out but the timing remains murky, and the chatter about how to proceed when the $600 billion bond-buying program known as QE2 wraps up in June is only going to get louder from here.
The big event will be the press conference to be held after the Fed's decision on Tuesday by Chairman Ben Bernanke. The appearance represents a historic move to improve transparency and has the chance to provide some great theater.
Written by Debra Borchardt in New York
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