That’s right!It’s earnings season.
For a little pre-season flavour, here’s Dan Greenhaus of BTIG:
It is with some level of excitement that we greet the “official” start of earnings season. Recent conversations with clients have been dominated by macro concerns with very little focus on fundamentals, one reason we would argue for the increase in correlations that we have observed among equities as well as other assets. One thing we have noticed of late though is the noticeable dearth of negative preannouncements. That is not to say all is well but if companies wanted to prepare investors for a poor earnings report, they appear to have missed the chance. With all that said, entering earnings season, the clients with which we’ve spoken appear to be cautiously optimistic.
For the quarter, we continue to expect S&P 500 earnings of about $24 (about 12% YOY growth) and for the full year, earnings of about $95 (about 11% YOY growth). One topic that has arisen in the minds of clients is the strength in the U.S. dollar and what effect it may have on overseas earnings translation. In the quarter, the trade weighted Dollar Index rose by 2.3%, its first up quarter since Q2 2010. In our presentation with clients, we touch on this subject by noting that roughly 20% of S&P 500 sales appear to be generated in European countries but that not all of these sales are generated in Euros. It makes it difficult to get a firm handle on what effect dollar strength might have but a modest hit to earnings in quarters following dollar strength is certainly not out of the question.
As for the big names coming up this week:
- Tuesday: AA
- Wednesday: HST, PEP
- Thursday: JPM, FAST, GOOG, SWY
- Friday: MAT