Wall Street should expect the unexpected in week three of Trump's America.
That's been true since Donald Trump swore an oath back in January, demolishing decades of political norms by becoming the first president to assume office with no prior political nor military experience.
The Trump White House has so far hit a number of speedbumps in its rollout of divisive executive orders. Stocks will likely continue to whipsaw as they have in recent weeks in response to whatever decree comes from the new administration. Late last week, Donald Trump promised bills on health care and tax reform were coming down the pipeline, details of which could play a hand in market direction.
In the past week, Trump temporarily banned immigrants from seven Muslim-majority countries, an order a number of federal judges ruled unconstitutional. The ban extended to lawful visa and greencard holders. Backlash to the order was swift with thousands protesting at airports across the country.
The White House also caused concern over its heavy-handed approach to diplomacy in recent days. The Treasury Department leveled sanctions against companies and people tied to Iran's ballistic missile testing, hours after Trump tweeted that Iran was "playing with fire" and that his administration would not be as kind to the nation.
Mid-week, a long-standing intelligence and military alliance between the U.S. and Australia was put to the test after Trump berated Prime Minister Malcolm Turnbull over a refugee agreement.
The reporting season enters its second half with more than 50% of S&P 500 companies having already reported. So far, nearly 67% have exceeded profit estimates, while 48% have beat revenue expectations. Average earnings for the S&P 500 in the fourth quarter are expected to increase 8% from the same period a year earlier, the second quarter of growth in a row.
"Companies have thus far delivered what the market needs," Jim Davis, regional investment manager at the Private Client Group of U.S. Bank, told TheStreet. "Earnings growth is crucial for equity markets in 2017 as the Fed is withdrawing liquidity and multiple expansion is unlikely. It is significant that earnings are beating estimates that have not been lowered as we have seen in past quarters."
In media and tech stocks, Twenty-First Century Fox (FOXA) will report on Monday; Walt Disney (DIS - Get Report) , Zillow (Z - Get Report) , Netgear (NTGR - Get Report) and Take-Two Interactive (TTWO - Get Report) on Tuesday; LionsGate (LGF) , Time Warner (TWX) and GrubHub (GRUB - Get Report) on Wednesday; and Activision Blizzard (ATVI - Get Report) , Expedia (EXPE - Get Report) , News Corp (NWSA - Get Report) , Nvidia (NVDA - Get Report) , Pandora (P) , Viacom (VIAB - Get Report) , Yelp (YELP - Get Report) , Zynga (ZNGA - Get Report) and Twitter (TWTR - Get Report) on Thursday.
In consumer stocks earnings, Hasbro (HAS - Get Report) , Sysco (SYY - Get Report) and Tyson Foods (TSN - Get Report) will report on Monday; Archer Daniels (ADM - Get Report) , Buffalo Wild Wings (BWLD) , The Container Store (TCS - Get Report) , General Motors (GM - Get Report) , Michael Kors (KORS) , Mondelez (MDLZ - Get Report) , Yum! China (YUMC - Get Report) and Panera Bread (PNRA) on Tuesday; Goodyear Tire (GT - Get Report) , Yum! Brands (YUM - Get Report) and Whole Foods Market (WFM) on Wednesday; and CVS Health (CVS - Get Report) , Coca-Cola (KO - Get Report) , Dunkin' Brands (DNKN - Get Report) and Kellogg (K - Get Report) on Thursday.
Other earnings of note include Loews (L - Get Report) on Monday; BP (BP - Get Report) , Genworth Financial (GNW - Get Report) , Gilead Sciences (GILD - Get Report) and Statoil (STO) on Tuesday; Allergan (AGN - Get Report) and GlaxoSmithKline (GSK - Get Report) on Wednesday; and Western Union (WU - Get Report) on Thursday.
On the economic calendar in the coming week, international trade for December will be released on Tuesday; weekly jobless claims are set for Thursday; and import and export prices for January and consumer sentiment for February on Friday.