Big Week Ahead in Q1 Earnings, Econ Data



Monday, April 18, 2022

We have a big week ahead of us following a three-day holiday weekend: Q1 earnings season shifts into a higher gear, and we get a decent amount of economic data hitting the tape, as well. Among these, we hear from

Netflix

NFLX


,

Tesla

TSLA


and

Procter & Gamble

PG


after the closing bells throughout the week, among the nearly 300 companies reporting this week overall. We also will see Housing Starts/Building Permits, Existing Home Sales, Beige Book, Philly Fed, PMI Manufacturing and Services and Thursday’s Jobless Claims.

Pre-market futures are down a bit to start the week: this follows two straight down weeks for the S&P 500 and Nasdaq, and three straight on the Dow. Between this week and next, we’ll be more than half way through the reporting of the entire S&P 500, with a bevy of more economic indicators reported between now and then. And these will all serve to inform the Fed, whose next policy meeting is the week after that.

Will we see selling pressure in the markets until the Fed announces its (inevitable) 50 basis-point rate hike on May 4th? That’s what we saw prior to the last Fed meeting in mid-March: indexes priced in all the bad news and then some — then, when the time came for the first rate hike in more than two years, we popped higher once we saw that the small rate hike was having an immediate positive effect on economic inflation. Perhaps the selling-off period — if we continue to see it over the next two weeks — would be a good time to buy into strong stocks at discounted prices.

Ahead of today’s open,

Bank of America

BAC


is out with Q1 earnings, with modest beats on both top and bottom lines: 80 cents per share topped the Zacks consensus by 4 cents (though still 6 cents light of the year-ago quarter) on revenues that barely squeaked out a beat — $23.23 billion versus $23.22 billion expected. Call the top-line result “in line.”

Positive aspects of Bank of America in the quarter were its zero days of trading losses, as well as its relatively low — actually, no — material exposure to Russia. We saw last week in

Citigroup

C


earnings that its sizable exposure to the sanctioned company (sizable compared to U.S. banks; European banks are a different story) dented the bank’s quarterly results.

For more on BAC’s earnings, click here.


Charles Schwab

SCHW


, on the other hand, posted its second consecutive earnings miss — that makes 5 negative earnings surprises in the last 10 quarters — with 77 cents per share missing both the 85 cents in the Zacks consensus and the 84 cents per share reported in the year-ago quarter. Revenues of $4.7 billion missed the $4.84 billion anticipated, and pre-market futures are dropping -7.5% ahead of the opening bell.


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