This week will be packed with U.S. corporations reporting earnings, in addition, housing reports and the German Ifo Business Climate headline the economic data. Among the companies reporting earning this week are Citigroup (C), Goldman Sachs (GS) & IBM (IBM). Bank earnings are expected to sequentially increase while IBM investors should see a sequential decline in earnings.
EARNINGS PREVIEW
Citigroup
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The expectation is for a sequential increase in revenue that falls to the bottom line.
Goldman Sachs
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Increases in trading revenue should boost the top-line at Goldman Sachs.
IBM
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We are anticipating a decline in Q1 revenue as enterprise clients reduce orders.
ECONOMIC DATA
Housing Data
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Building permits and housing starts should continue to increase while a fall in prices is needed to increase existing home sales.
Philly Fed Index
The Philly Fed Manufacturing Index is expected to increase at a modest pace.
German Ifo Business Climate
German business climate is expected to continue to improve as activity in Europe begins to increase in the coming months.
Conclusion
Earnings reports and economic data will move markets this week. We will probably see some selling on the news with regard to bank shares and IBM could disappoint to the downside. We expected the market to continue to decline; as the cost of equity declines the bull market should continue heading into the summer months. On the other hand, the market could rally this week on strong economic data. Either way, we expect the bull market to continue.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
