Wall Street awaits the results, fears forecasts
July 11, 2010 – 3:30 pmWall Street preparing for a decisive week saw the publication of quarterly several heavyweights in the U.S. economy that will set the tone for future meetings on the U.S. equity market.
But even before the opening of the new earnings season, optimism is not appropriate for analysts.
Confidence is at its lowest since May 2009, according to a note Beaspoke Investment Group said that they have lowered their forecasts for 572 companies listed on the S & P 1500 over the last four weeks.
Meanwhile, investors are betting that 21% on an upward trend of the market, according to a study by the American Association of Individual Investors.
This crisis of confidence but may be tempered to read the forecasts of analysts who predict the performance of groups listed on the S & P 500 were up by 27% for the second quarter, more than the 22% increase posted during the three first months of the year.
But even if these forecasts prove correct, such results would all of a Pyrrhic victory if the forecast is disappointing, as if expecting much.
"There are many concerns about the state of the economy and the market reflects these concerns," said Cleveland Rueckert, market strategist at Birinyi Associates in Stamford.
"For now, the market expects a slowdown, the attention will focus not only on results but also on the forecasts."
JPMORGAN IN THE LINE OF SIGHT
Not surprisingly, the launch of the new season will be given quarterly by Alcoa on Monday after closing, before Google, Intel, JPMorgan and Bank of America does not engage in turn their results.
The figures from JPMorgan will be scrutinized carefully because investors are likely to think that it is the financial package which will cause a market rebound, rebound if there a.
But some analysts fear that disappointment prevails in reading the quarterly JPMorgan.Such an outcome would jeopardize the fragile recovery in equity markets seen last week.
In addition to the cascade of numbers expected next week, markets will look obviously at the publication of minutes of last meeting of the Monetary Policy Committee of the Federal Reserve.
They will look particularly at whether the Fed fears that the U.S. gross domestic product is affected by the crisis of European sovereign debt.
Side indicators, they will follow the business inventory figures, those of producer prices and weekly unemployment registrations, not to mention the Reuters / University of Michigan who will inform the markets about the state of consumer confidence.
Particular attention will be paid on figures published on Thursday China's GDP for the second quarter should show a slowing to 10.5% from one year to another.
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