Earnings season is coming upon us like a freight train coming down the tracks, and if you have ever lived near tracks, when the train comes by there is no ignoring it. I can remember visiting my wife in Iowa before we were married and she lived in a town close to train tracks. When the train came, the whistle would blow, you could hear the thundering of the wheels and it got your attention. In the same way, when corporations report their earnings, investors have no choice but to pay attention. They give us signals for where the trend is going for specific sectors and sometimes the market as a whole. Here are some reports that you really need to be paying attention to for this week.
Monday, April 16th
This is the lightest earnings day of the week, but the banking sector will be in focus with the likes of Citigroup (C) and M&T Bank (MTB). The banks have really struggled as of late, therefore this report will be very important. Citigroup in particular is expected to report $1.01 EPS for this quarter. A strong quarter should shout "ollie, ollie, oxen free" for the financials. If the earnings report falls short, we can expect the financials to continue to struggle.
Tuesday, April 17th
Tuesday, some of the big-heavies are set to report. For the tech sector, IBM (IBM) and Intel (INTC) are announcing their earnings. IBM is expected to report $2.64 while Intel's expectation is $0.50 per share. This quarter tends to be a weaker quarter for IBM, but I anticipate strong numbers from both companies which should add strength and support the recent bull market in technology stocks. Also set to report is Yahoo (YHOO). They are not the powerhouse that they once were, but it will give us an additional look at internet companies.
Johnson & Johnson (JNJ) is also set to report before the bell. The average estimate for them is $1.35 which I anticipate they will hit on or near that number. Such a report would support the future strength of the market in general. The Coca-Cola Company (KO) will also release their results prior to the market opening, which should also be a broad-market indicator.
Finally, keep an eye on Goldman Sachs (GS) as they report their first quarter results. The estimate is $3.46 EPS and this report will give additional data for the financial sector.
Tuesday will be a huge load of earnings that could heavily impact the direction of this market. Keep an eye on these earnings to see if the strength of this market continues to grow. Good numbers should indicate a go ahead to invest at will.