We start the first quarter earnings reports this afternoon with Alcoa.
Earnings prospects continue to decline for US companies not involved in the energy sector. Especially hard hit will be the financials.
The biggest events this week may be currency related with interest rate decisions from the ECB and BOE, and the US Trade deficit and IM/EX prices at the last part of the week.
Be careful with trading this information since much has already been discounted in the current stock market prices, and volumes on the NYSE are the lowest of the year.
Be even more careful about listening to the usual Wall Street siren song about now being the time to buy. Its traditional to try and lure the non-US and small investor into the market to help cushion the next leg down, which looks like at some point within the next month or so. A 'trigger event' could take this market down sharply despite the best efforts of the President's Working Group on Markets and the Federal Reserve trying to overlay the cracks with the plaster of monetary inflation.
P.S. @ 5:25 PM - After the closing bell today Alcoa missed estimates, and Advanced Micro Devices (AMD) warned.
Wall St sees sharper drop in Q1 earnings
NEW YORK: April 7, 2008 (Reuters) Wall Street analysts have cut their first-quarter earnings forecasts for US companies even further, according to figures from media estimates on Monday.
Earnings for Standard & Poor's 500 companies are now expected to decline 11.8 per cent, compared with the 8.1 per cent drop projected last week. When the quarter began on January 1, analysts had forecast earnings to grow 4.7 per cent in the period.
The revised forecast comes as a deep global credit crisis has dented the profit outlook for many US companies, particularly those in the financial sector. Financial companies are expected to be affected the most, with earnings projected to fall 61 percent. Consumer companies follow, with earnings expected to drop 11 per cent as US shoppers faced with higher food and energy prices and declining home values spend carefully.
The energy and technology sectors are expected to show the best gains for the quarter, up 33 per cent and 10 per cent respectively, according to Reuters Estimates.
The overall projected rate combines actual figures for companies that have reported with estimates for companies that have not.
The turbulent environment has prompted most companies to issue negative outlooks for the upcoming quarter. There are 242 negative outlooks, and 169 positive, according to Reuters Estimates.
