The first-quarter earnings season is already upon us with the big banks set to kick off the reporting period in the coming week.
Hopes are high for another period of growth for companies in the S&P 500. Operating income is expected to increase more than 9% during the first quarter, according to FactSet, the fastest pace in just over five years. Another period of growth would mark the third straight quarter of earnings gains in a row.
A solid first quarter should fuel even more gains for the stock market, which currently remains near record highs on overall economic strength and solid fundamentals.
"So far the economy and the markets stateside as well as abroad have shown resilience even as they remain prone to rebalancing and rotation," John Stoltzfus, chief investment strategist at Oppenheimer, wrote in a note. "This suggests to us that economics and corporate earnings remain paramount to the continued progress of the bull market."
Also on the earnings calendar in the coming week: Fastenal (FAST) , Pier 1 Imports (PIR) and Dominion Diamond Corp (DDC) will report on Wednesday; and PNC Financial (PNC) and Taiwan Semiconductor (TSM) are scheduled for Thursday.
As always, the Trump administration could spook markets in the coming week even as Washington grows quieter with Congress on break. Investors will be on watch for the fallout, if any, from a missile strike against a Syrian air base last Thursday evening. Donald Trump has managed to shock and surprise Wall Street since his election win in November, and will likely continue to do in coming months, especially as he attempts massive tax reform.
"While political developments in Washington and around the world are likely to garner the most attention across media headlines in the months ahead, we expect investors will focus their attention on earnings results, economic data and signals from Federal Reserve officials as to what pace and with what frequency the process of interest rate normalization will take place," noted Stoltzfus.
Fed Chair Janet Yellen headlines a week of little policy talk. Yellen will speak at the University of Michigan's Ford School of Public Policy on Monday and could take audience questions. Investors will be on the lookout for commentary on the pace of rate hikes this year and any hints as to when the central bank will begin to reduce its balance sheet.
On the economic calendar in the coming week: The Job Openings and Labor Turnover Survey for February will be released on Tuesday; import and export prices for March on Wednesday; producer prices for March on Thursday; and consumer prices and retail sales for March, and business inventories for February on Friday.
The markets will be closed on Friday for the Easter weekend, though banks will remain open. Markets will resume operations as normal on Monday.
(What will move markets this quarter and how should investors position themselves ahead of time? Jim Cramer sat down with four of TheStreet's top columnists recently to get their views. Click here to listen to his latest Trading Strategies roundtable with them and read their advice for stocks, bonds, forex and gold).