Now, some analysts believe that first quarter earnings could not really fall, a welcome departure from the doomsday scenarios investors once feared. The profits of S & P 500 have not fallen since mid-2016 in any quarter compared to the previous year.
Wall Street analysts expect Credit Suisse earnings to decline by 2.5% per share at the start of the first quarter earnings season. By Friday morning, this estimate was just in the positive range.
Considering expectations that exceed expectations (analysts usually set the bar low), S & P 500 earnings are expected to increase by 2.5% to 3% by the end of the earnings season, Credit Suisse estimates.
It's no coincidence. We're in the winning season: S & P 500 companies that have already reported profits account for half of the index value. The results have impressed so far.
Almost 80% of companies achieved results that exceeded Wall Street expectations, which were above the three-year average of 71%, according to Credit Suisse.
Wall Street, however, still has no problems with the profits.
Simply exceeding expectations is not enough for shareholders today.
Companies that outperformed earnings estimates gained less than 1% on their earnings response days, according to Bespoke. That's less than half of the average daily gain of 1.9% over the last two decades.
Companies that missed earnings per-profit this month averaged 4.6% down on the historical average of 3.5%, according to a Friday report from Bespoke Investment Group.
One main area that should be observed is the previously weaker company turnover.
According to the Bespoke Investment Group, only 54% of companies that reported results outperformed sales estimates.
"This is definitely a problem," write Bespoke's analysts.
US Federal Reserve Guideline: The Federal Reserve will hold this two-day Political Meeting in April and May this week, culminating on Wednesday at 2:00 pm (ET) with the interest rate decision and the current policy update ,
It is generally believed that the central bank has won. t change his interest rates. The CME FedWatch shows that the market requires a 98% chance that interest rates will be held. Nevertheless, the meeting could be market-moving. Investors will raise the profile of Fed President Jerome Powell on the economy.
After raising interest rates four times last year, the US Federal Reserve cut its foot in January and sent financial markets into a frenzy. Investors wondered if the central bank should cut interest rates next, which should boost the economy. However, Friday's GDP pressure should have calmed those worries, at least for now. The United States grew 3.2% between January and March, with subdued inflation. This gives the Fed more room to run the economy.
3. Jobs, Jobs, Jobs: This week, many important economic data are on the agenda, including personal income, manufacturing and trade data. Most important, however, is Friday's job report, which is due at 8:30 am (CET). It includes non-agricultural payroll and hourly wages. The unemployment rate is expected to remain unchanged at 3.8%.
Last month, headlines were better than expected, but wages remained behind.
Wage inflation was to the sufferers of both market participants and central governments stubbornly low bankers. The Fed's inflation target is around 2%, but wages inflation rates have raised questions about the use of the inflation target.
Ahead of the Employment Report, unemployment claims are due on Thursday for the week ended April 27. The claims are expected to be 215,000, according to refinancing.
4. King Dollars: Less determined words from the Fed and other economic data that boosts the point that the US economy is healthy could also boost the US dollar ,
Compared with his colleagues, the United States, this could play a role is the strongest economy on the block. And if the eurozone's GDP release this week is not surprising, the dollar's superiority can hardly be questioned. While many of the goodies are already priced into the price, analysts consider it too attractive not to miss.
On Thursday, the ICE Dollar Index reached its highest level since May 2017.
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Sunday – Beginning of the Milken Global Conference in California