Week ahead: Earnings Season in Full Swing

Some data releases this week, but most traders will be paying attention to earnings season in the US as big names like Morgan Stanley, Tesla and Blackstone begin to release their Q1 figures. Paying particular attention to the financial sector, some positive earnings surprises may be just what is needed to bolster recently shaken market sentiment.

Here are the week’s key events:

Monday

A slow start to a strong week. Traders may take notice of the New York Manufacturing Index release purely because it fell so short of expectations last month; slumping to -24.6. However, this is a small snapshot of the US economy. In terms of earnings, analyst consensus for Charles Schwab (SCHW) seems to forecast stronger earnings and revenue. The company doesn’t have a strong history of earnings surprises, but even moderate results may bolster some valuation recovery from the hit taken as a result of the SVB collapse.

Earnings: Charles Schwab (SCHW)

Tuesday

Truly kicking off earnings season on Tuesday, there are some big mover and shakers releasing: Johnson & Johnson (JNJ), Netflix (NFLX), Bank of America (BAC), and Goldman Sachs (GS). JNJ has a history of earnings surprises, outperforming analyst predictions in 8 out of 12 quarters between 2019 and 2021. With better monetisation NFLX also has potential to outperform earnings despite slowing subscriber growth according to Forbes. BAC and GS will be the more interesting releases however, as good performance will likely contribute to a calmer market outlook and recovery in the financial sector overall.

Earnings: Johnson & Johnson (JNJ), Netflix (NFLX), Bank of America (BAC), and Goldman Sachs (GS)

Wednesday

Another big day for earnings, Morgan Stanley (MS), Tesla (TSLA) and IBM (IBM), is coupled with a CPI release in the UK; which has every chance to remain stubbornly high. Last month MS Chief US Equity Strategist Mike Wilson said investors could see "several more quarters" of disappointing corporate earnings, which seems ironic considering the positive predictions for potential earnings surprises this quarter from Zacks for MS itself. Tesla has a strong history of earnings outperformance and posted record deliveries this quarter, but analysts still expect earnings to shrink compared to Q1 last year. IBM is also reporting but is unlikely to offer any big movements according to Forbes.

Earnings: Morgan Stanley (MS), Tesla (TSLA) and IBM (IBM)

Thursday

Not slowing down, AT&T (T), American Express (AXP) and Blackstone (BX) release earnings on Thursday. AT&T has outperformed analyst predictions in 75% of the last eight quarters according to CNBC - although predictions for Q1 earnings seem to be lukewarm, with the Zacks Consensus Estimate falling 1.3% last month. AXP earnings could be a pleasant surprise according to Jefferies Group, which recently upgraded their forecast by nearly 3%. Finally, BX will be the last financial sector earnings release of the week, meaning it could set the tone either way for market sentiment at least in the short term.

Earnings: AT&T (T), American Express (AXP) and Blackstone (BX)

Friday

Finally slowing down, Procter & Gamble (PG) is the only earnings release of note ending the week. PG has recently been on Zacks list of the most searched stocks. However, despite the interest, analysts' consensus for potential surprises seems low. Perhaps more interestingly, flash PMI manufacturing and services figures for the US, the UK, Germany and France are all releasing. These reports will be of interest to traders as they provide early insights into the health of these economies moving forward.

Earnings: Procter & Gamble (PG)