“It’s make or break time for corporate profits, with dozens of companies—from Facebook to Ford— reporting in the week ahead.
The pressure is on for those earnings to support the market’s current valuations, after weeks of choppy trading. It’s also crunch time to see whether it really was the harsh winter weather that slowed profit growth—and the economy—or something else.
“Does spring make a difference? And in what industries does it make a difference? If that doesn’t come across, it may raise some confusion about what the economic data is telling us,” said Art Cashin, director of floor operations at UBS.
About 150 S&P 500 companies are scheduled to release quarterly results through Friday, in an earnings season that has been so far mediocre, though nearly two-thirds of companies are beating Wall Street estimates. On the economic front, there is housing data with existing home sales Tuesday and new home sales Wednesday, and durable goods are reported Thursday.
Developments in Ukraine will also be watched, after signs of progress Thursday. Diplomats negotiating in Geneva announced an agreement to refrain from violence on all sides, disarm militants and release seized buildings.
Corporate profits though will be the key test for a stock market that ended the past week higher, after a violent shakeout in high flying biotech and tech momentum names. Nasdaq, down the prior three weeks, ended the week more than 1 percent higher at 4095, after coming to the brink of correction territory with a total 9.7 percent decline by Tuesday.
The Dow, off slightly Friday, was up 2.4 percent for the week at 16,408, and the S&P 500 ended the four-day trading week up 2.7 percent, at 1864……”
