Oil and interest rates have been driving the stock market for the past few weeks, but the focus is about to shift back to the bottom line.
"The next month is all about earnings and investor reaction to those earnings," says Frank Husic, chief investment officer of Husic Capital Management. "The macro numbers have a temporary effect on trading, but the long-term impact relates to how companies are really doing. And that means corporate profits."
The busy earnings week starts with Monday's reports from
. After the bell, all eyes will turn to
. Analysts expect the biotech giant to earn 25 cents, up from 19 cents last year, on revenue of $1.37 billion.
On Tuesday, drugmaker
takes the earnings stage, along with heavily shorted Internet travel agent
The earnings calendar picks up additional steam on Wednesday with
Advanced Micro Devices
Investors also can plug into
earnings on Wednesday. Analysts forecast the iPod manufacturer will earn 24 cents a share for the quarter, more than tripling last year's number, on $3.15 billion in sales.
The parade will keep rolling on Thursday when heavyweights
New York Times
release their quarterly results.
The high-profile earnings week concludes on Friday with reports from toymaker
and banking powerhouse
also report their fiscal first quarters on Friday.
Analysts expect GE to earn 37 cents, up from 32 cents last year. The revenue target is $38 billion -- roughly on par with Iraq's GDP in 2004. Citigroup, meanwhile, should earn $1.02 a share, up from 98 cents last year, on revenue of $22.7 billion. That's just a tad under North Korea's 2004 GDP.
And earnings season notwithstanding, the economic calendar is chock full in the coming week.
The red ink will be flowing on Tuesday when the nation's trade balance for the month of February and Treasury budget for March are released. Analysts expect the trade balance to be negative $58.3 billion, on par with the prior month. The experts predict the budget will arrive $73 billion in the red, just a small pork project higher than last month's $72.9 billion.
"The trade data is important for bonds and currencies, which in today's market makes it equally important for stocks," says Paul Mendelsohn, strategist at Windham Financial. "When bond yields move up, stocks have been selling off."
The budget will be released at 2 p.m. EDT, along with the
minutes from the March 22 meeting.
"We saw the result of the Fed's last meeting, now we get to see what's behind the decision," says Mendelsohn. "This should be a market mover once we find out where Greenspan is really going."
Retail sales data will be released on Wednesday, followed by business inventories and initial claims on Thursday.
The week finishes on Friday with a flurry of economic data, including import and export prices, capacity utilization, industrial production and Michigan sentiment.