Week Ahead on Wall Street: Earnings Launch

Let the Reporting Begin

Investors are finding themselves at crossroads: Inflation seems to have plateaued, geopolitical risk is heightened, and concerns that we will see no interest rate cuts this year are rising. With so much going on, it might be hard to see the forest for the trees.

But there’s something new to focus on: The start of earnings season is finally here!

Before we preview what investors expect for the reporting season, Let’s level–set. When you invest in a stock, you are investing in a company’s present and future results. In other words, it’s not enough for a company to report a good previous quarter. Its guidance and outlook are vital, too.

With that out of the way, investors expect y/y earnings growth of 3% in the first quarter of 2024. That would be a big step down from the strong pace set in the previous quarter.

But this doesn’t mean it will be a bad year (or quarter) for company earnings. Consensus estimates are for earnings growth to be much higher later in the year. So keep that in mind as this earnings season rolls in.

Investors will be keen to hear what management teams tell us, including their assessment of the continued elevated inflation that roiled markets last week.

Economic and Earnings Calendar

Monday

•   April Empire State Manufacturing Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

•   March Retail Sales: This is a key indicator of consumer demand.

•   April NAHB Housing Market Index: This index tracks how homebuilders feel about the current and future state of the single-family housing market.

•   Fedspeak: Dallas Fed President Lorie Logan will take part in a discussion at a Bank of Japan and International Monetary Fund conference. New York Fed President John Williams will make an appearance on Bloomberg Television. San Francisco Fed President Mary Daly will give keynote remarks and take part in Q&A at the Stanford Institute for Economic Policy Research.

•   Earnings: Goldman Sachs Group (GS), M&T Bank (MTB), Charles Schwab (SCHW)

Tuesday

•   March Building Permits and Housing Starts: Construction data is a leading indicator of business activity.

•   April New York Services Activity: The New York Fed’s survey of non-manufacturing executives in the region on business conditions and their outlook.

•   March Industrial Production and Capacity Utilization: The industrial sector accounts for much of the cyclical swings in economic activity.

•   Fedspeak: Fed Vice Chair Phillip Jefferson will deliver keynote remarks at the Fed’s International Research Forum on Monetary Policy. Richmond Fed President will speak on the economic outlook. Fed Chair Jerome Powell will take part in a discussion with the Governor of the Bank of Canada.

•   Earnings: Bank of America (BAC), Bank of New York Mellon (BK), JB Hunt Transport Services (JBHT), Johnson & Johnson (JNJ), Morgan Stanley (MS), Northern Trust (NTRS), Omnicom Group (OMC), PNC Financial Services Group (PNC), United Airlines (UAL), UnitedHealth Group (UNH)

Wednesday

•   Fed Beige Book: This report is released eight times per year and tracks the state of the economy based on qualitative information.

•   Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

•   Fedspeak: Cleveland Fed President Loretta Mester will give an update on all things Fed. Fed Governor Michelle Bowman will take part in a fireside chat with the Institute of International Finance.

•   Earnings: Abbott Laboratories (ABT), Crown Castle International (CCI), Citizens Financial Group (CFG), CSX (CSX), Discover Financial Services (DFS), Equifax (EFX), Kinder Morgan (KMI), Las Vegas Sands (LVS), Prologis (PLD), Travelers Companies (TRV), US Bancorp (USB)

Thursday

•   April Philadelphia Fed Manufacturing Activity: The Philadelphia Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

•   March Leading Economic Index: This is an index composed of various economic indicators that have historically led changes in the broader economy.

•   March Existing Home Sales: Most home transactions in any given month tend to come from the existing market, and as a result set the tone for the broader housing market.

•   Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

•   Fedspeak: Fed Governor Michelle Bowman will give opening remarks at the 2024 New York Fed Regional and Community Banking Conference. New York Fed President John Williams will participate in a discussion at the Semafor World Economy Summit. Fed Governor Michelle Bowman will take part in a fireside chat at the SIFMA Basel III Endgame Roundtable. Atlanta Fed President Raphael Bostic will take part in a fireside chat on the economic outlook. Atlanta Fed President Raphael Bostic will take part in a fireside chat on the economic and monetary policy outlook, in addition to real estate more broadly.

•   Earnings: Blackstone Group LP (BX), Comerica (CMA), DR Horton (DHI), Anthem (ELV), Genuine Parts (GPC), Intuitive Surgical (ISRG), KeyCorp (KEY), Marsh & McLennan Companies (MMC), Netflix (NFLX), PPG Industries (PPG), Snap-on (SNA)

Friday

•   Fedspeak: Chicago Fed President Austan Goolsbee will take part in a Q&A at the Society for Advancing Business Editing and Writing annual conference.

•   Earnings: American Express (AXP), Fifth Third Bancorp (FITB), Huntington Bancshares (HBAN), Procter & Gamble (PG), Regions Financial (RF), Schlumberger (SLB)

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