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Q1 USA Earnings Season Picks Up Steam: Global Week Ahead
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Quarterly EPS and revenue (and, of course, earnings estimates) data matter.
But across the weekly build-up of major Q1 S&P500 earnings reports, CEO and CFO outlooks are often more important to stocks.
This is always the case.
In the Global Week Ahead, other possible market influences are not likely to trump those stock trading cards, once they are played, in a daily sequence.
According to Zacks Research Director Sheraz Mian (and me), the U.S. gets into the heart of its Q1 earnings season this week.
Stock traders will be able to review Q1-22 results from more than 150 companies reporting results, including 63 S&P500 index members.
This week’s sequential line-up of reports provides a representative cross-section of all sectors, ranging from:
Bank of America (BMO on Monday, April 18th)
Halliburton (BMO on Tuesday, April 19th)
Johnson & Johnson (BMO on Tuesday, April 19th)
IBM (AMC on Tuesday, April 19th)
Netflix (AMC on Tuesday, April 19th)
Procter & Gamble (BMO on Wednesday, April 20th)
Tesla (AMC on Wednesday, April 20th), to:
All the major regional banks and brokers.
Here are Some Other Key Global Events in the Global Week Ahead—
(1) Mid-Week, Mainland China Likely to Get Monetary Boost
According to Scotiabank’s Global FX team, China’s economy will be a significant focal point.
The People’s Bank of China (PBoC) is expected to cut its one-year Medium Term Lending Facility rate, which will probably tee up subsequent reductions in the one-year and five-year Loan Prime Rates on April 19th. We may also see further declines in reserve ratio requirements.
Recognition of the need to adjust policy has increased. Premier Li warned this past week that policymakers should “add a sense of urgency” to easing efforts. Li was also advising fiscal policymakers to cut taxes and fees and introduce incentives to support job markets.
The head of the PBOC’s monetary policy department subsequently responded to the advice from on high by stating “Downward pressure on the economy has increased currently. We will use monetary policy tools including reserve requirement ratio reduction at the proper time.”
(2) Countdown to French Presidential Election
The final week of France’s election campaigning is underway.
So, the countdown is on to the second and deciding round of France’s presidential elections held on Sunday, April 24th.
As polls continue to roll in, they may further inform the odds of winning. Although don’t forget how they blew it, by seriously underestimating Macron’s two-to-one margin of victory over Marine Le Pen in 2017.
(3) On Thursday, Both Fed Chair Powell and ECB President Lagarde Speak
Apart from the PBOC, central banks will be relatively quiet this coming week.
The only other central bank decision on tap will be delivered by Bank Indonesia on Tuesday. Consensus unanimously expects a hold with the 7-day reverse repo rate remaining unchanged at 3.5%.
With IMF spring meetings underway this week, Federal Reserve Chair Powell and ECB President Lagarde appear jointly on an IMF panel on the global economy on Thursday.
Lagarde’s comments follow upon the ECB meeting last week, where it was indicated that a growing consensus expect to deliver a 25 basis point rate hike in Q3. Several ECB members are agitating for an earlier end to the Asset Purchase Program than the current plan to do so by Q3.
Powell’s comments come before the Fed’s next meeting on May 4th, when the FOMC is expected to hike by 50 basis points.
Top Zacks #1 Rank (STRONG BUY) Stocks
I looked for three U.S. large cap stocks – ones that may not be too interest-rate sensitive -- this week. I listed them in order of their looming Q1 EPS reports.
(1) AutoNation (AN - Free Report) : This retail/wholesale auto part suppliers shares price at $102 now, making for a $6.2B market cap stock. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of D. Company report BMO on Thursday, April 21st.
(2) Marriott International (MAR - Free Report) : Nice to see a hotel chain make our #1 list now. These shares trade at $180, making for a $59B market-cap stock. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of D. Company reports on May 9th.
(3) Target (TGT - Free Report) : This major big box U.S. retailer share’s trade at $237 now, making for a market cap of $109.7B. I see a Zacks Value score of A, a Zacks Growth score of A and a Zacks Momentum score of D. Company reports on May 18th.
Unfortunately, the Zacks Momentum scores are all D here. These favored shares are struggling with the broad market’s weakness too.
Key Global Macro
I would focus on fresh U.S. housing data that shows up this week, given the steep rise in 30-year fixed mortgage finance rates seen over the last 5 weeks.
On Monday, it is Easter Monday is various parts of the world.
China’s Q1 GDP growth should be +4.4% y/y. There is a China National Bureau of Statistics (NBS) press conference.
The U.S. NAHB Housing Market Index comes out. 77 in March should follow at 79 in February. Still strong.
St. Louis Fed President Bullard speaks.
On Tuesday, the IMF spring meeting starts and runs the rest of the week.
U.S. housing starts for March (1.7838M) may dip again based upon permits. The prior was 1.769M. Still strong though.
Chicago Fed’s Evans speaks.
On Wednesday, the PBoC interest rate decision hits the global tapes.
The Fed’s Beige Book on regional conditions comes out. Housing differences may be worth investigating here.
Eurozone industrial production is expected to accelerate. Look for +0.8% y/y in Feb, up from -1.3% in the prior reading.
One interesting report from the Asia-Pacific region may be New Zealand’s Q1 CPI estimate. This is likely to go from +5.9% y/y in Q4-21 to over +6.0%. That would triple the RBNZ’s 2.0% inflation target and double the upper limit of the 1.0% to 3.0% inflation target range.
Existing U.S. home sales for March land. Home sales are expected to dip to 5.8M from 6.02M, based on prior weakness in pending home sales, which close and turn into completed resales within 30 to 90 days.
San Francisco’s Daly speaks.
On Thursday, the Japanese CPI for March is likely to cross a 1.0% y/y threshold for the first time since October 2018, but it will remain far below the Bank of Japan’s (BoJ) target. A reading of +1.3% is the consensus, with +0.9% as the prior.
The Euro Area HICP (a key consumer inflation rate there) for March should be +7.5% y/y.
Powell and Lagarde speak at the IMF spring meetings.
On Friday, Malaysia’s consumer price inflation (CPI) rate should also see upward pressure. But at +2.2% y/y in February it was not threatening Bank Negara Malaysia’s 2.0% to 3.0% inflation target range. The range of CPI experiences out there, at the moment, is fascinating, to this economist.
U.K. retail sales come out for March. I note a +2.8% y/y reading for broad retail sales here, versus +7.0% in the prior reading, with ex-fuel readings up only +0.6% y/y in March. Ah yes, gasoline prices are spiking everywhere.
The latest weekly U.S. Baker Hughes oil rig count comes out. Do the domestic guys ever ramp up the drilling, in the face of $100+ WTI oil prices?
Conclusion
For a number of weeks, we have seen a very rough patch, for nearly all stocks.
Let’s hope the ramp up of Q1 earnings season brings more favorable sentiment upon the soggy risk markets.
Good luck trading and investing in stocks.
That’s it for me.
Warm Regards,
John Blank
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Q1 USA Earnings Season Picks Up Steam: Global Week Ahead
Quarterly EPS and revenue (and, of course, earnings estimates) data matter.
But across the weekly build-up of major Q1 S&P500 earnings reports, CEO and CFO outlooks are often more important to stocks.
This is always the case.
In the Global Week Ahead, other possible market influences are not likely to trump those stock trading cards, once they are played, in a daily sequence.
According to Zacks Research Director Sheraz Mian (and me), the U.S. gets into the heart of its Q1 earnings season this week.
Stock traders will be able to review Q1-22 results from more than 150 companies reporting results, including 63 S&P500 index members.
This week’s sequential line-up of reports provides a representative cross-section of all sectors, ranging from:
All the major regional banks and brokers.
Here are Some Other Key Global Events in the Global Week Ahead—
(1) Mid-Week, Mainland China Likely to Get Monetary Boost
According to Scotiabank’s Global FX team, China’s economy will be a significant focal point.
The People’s Bank of China (PBoC) is expected to cut its one-year Medium Term Lending Facility rate, which will probably tee up subsequent reductions in the one-year and five-year Loan Prime Rates on April 19th. We may also see further declines in reserve ratio requirements.
Recognition of the need to adjust policy has increased. Premier Li warned this past week that policymakers should “add a sense of urgency” to easing efforts. Li was also advising fiscal policymakers to cut taxes and fees and introduce incentives to support job markets.
The head of the PBOC’s monetary policy department subsequently responded to the advice from on high by stating “Downward pressure on the economy has increased currently. We will use monetary policy tools including reserve requirement ratio reduction at the proper time.”
(2) Countdown to French Presidential Election
The final week of France’s election campaigning is underway.
So, the countdown is on to the second and deciding round of France’s presidential elections held on Sunday, April 24th.
As polls continue to roll in, they may further inform the odds of winning. Although don’t forget how they blew it, by seriously underestimating Macron’s two-to-one margin of victory over Marine Le Pen in 2017.
(3) On Thursday, Both Fed Chair Powell and ECB President Lagarde Speak
Apart from the PBOC, central banks will be relatively quiet this coming week.
The only other central bank decision on tap will be delivered by Bank Indonesia on Tuesday. Consensus unanimously expects a hold with the 7-day reverse repo rate remaining unchanged at 3.5%.
With IMF spring meetings underway this week, Federal Reserve Chair Powell and ECB President Lagarde appear jointly on an IMF panel on the global economy on Thursday.
Top Zacks #1 Rank (STRONG BUY) Stocks
I looked for three U.S. large cap stocks – ones that may not be too interest-rate sensitive -- this week. I listed them in order of their looming Q1 EPS reports.
(1) AutoNation (AN - Free Report) : This retail/wholesale auto part suppliers shares price at $102 now, making for a $6.2B market cap stock. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of D. Company report BMO on Thursday, April 21st.
(2) Marriott International (MAR - Free Report) : Nice to see a hotel chain make our #1 list now. These shares trade at $180, making for a $59B market-cap stock. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of D. Company reports on May 9th.
(3) Target (TGT - Free Report) : This major big box U.S. retailer share’s trade at $237 now, making for a market cap of $109.7B. I see a Zacks Value score of A, a Zacks Growth score of A and a Zacks Momentum score of D. Company reports on May 18th.
Unfortunately, the Zacks Momentum scores are all D here. These favored shares are struggling with the broad market’s weakness too.
Key Global Macro
I would focus on fresh U.S. housing data that shows up this week, given the steep rise in 30-year fixed mortgage finance rates seen over the last 5 weeks.
On Monday, it is Easter Monday is various parts of the world.
China’s Q1 GDP growth should be +4.4% y/y. There is a China National Bureau of Statistics (NBS) press conference.
The U.S. NAHB Housing Market Index comes out. 77 in March should follow at 79 in February. Still strong.
St. Louis Fed President Bullard speaks.
On Tuesday, the IMF spring meeting starts and runs the rest of the week.
U.S. housing starts for March (1.7838M) may dip again based upon permits. The prior was 1.769M. Still strong though.
Chicago Fed’s Evans speaks.
On Wednesday, the PBoC interest rate decision hits the global tapes.
The Fed’s Beige Book on regional conditions comes out. Housing differences may be worth investigating here.
Eurozone industrial production is expected to accelerate. Look for +0.8% y/y in Feb, up from -1.3% in the prior reading.
One interesting report from the Asia-Pacific region may be New Zealand’s Q1 CPI estimate. This is likely to go from +5.9% y/y in Q4-21 to over +6.0%. That would triple the RBNZ’s 2.0% inflation target and double the upper limit of the 1.0% to 3.0% inflation target range.
Existing U.S. home sales for March land. Home sales are expected to dip to 5.8M from 6.02M, based on prior weakness in pending home sales, which close and turn into completed resales within 30 to 90 days.
San Francisco’s Daly speaks.
On Thursday, the Japanese CPI for March is likely to cross a 1.0% y/y threshold for the first time since October 2018, but it will remain far below the Bank of Japan’s (BoJ) target. A reading of +1.3% is the consensus, with +0.9% as the prior.
The Euro Area HICP (a key consumer inflation rate there) for March should be +7.5% y/y.
Powell and Lagarde speak at the IMF spring meetings.
On Friday, Malaysia’s consumer price inflation (CPI) rate should also see upward pressure. But at +2.2% y/y in February it was not threatening Bank Negara Malaysia’s 2.0% to 3.0% inflation target range. The range of CPI experiences out there, at the moment, is fascinating, to this economist.
U.K. retail sales come out for March. I note a +2.8% y/y reading for broad retail sales here, versus +7.0% in the prior reading, with ex-fuel readings up only +0.6% y/y in March. Ah yes, gasoline prices are spiking everywhere.
The latest weekly U.S. Baker Hughes oil rig count comes out. Do the domestic guys ever ramp up the drilling, in the face of $100+ WTI oil prices?
Conclusion
For a number of weeks, we have seen a very rough patch, for nearly all stocks.
Let’s hope the ramp up of Q1 earnings season brings more favorable sentiment upon the soggy risk markets.
Good luck trading and investing in stocks.
That’s it for me.
Warm Regards,
John Blank