Investors on tenterhooks as US giants post results
The US corporate earnings season shifts up a gear next week following the Easter break with nearly one-third of S&P 500 names set to post results.
Investors are hoping the news provides a catalyst to buy stocks and put recent market weakness behind them.
Several behemoths, including Apple, the largest US company by market value, as well as Microsoft, McDonald's and AT&T, are due to report earnings.
They'll be accompanied by highfliers like Netflix and Facebook, giving the first real cross-section of the state of corporate America as temperatures rise across the country and investors hope to put the cold weather behind them.
Strategists will also be looking for clues on how badly China's slowdown hits US corporate results.
The first batch of earnings came out as equities were working their way through a selloff led by trading-crowd favourites like Netflix and the biotech stocks. With the late-week recovery, the hope is that recent volatility has ebbed. If poor results dominate next week's action, it could reignite the selling.
"We are still off our highs, but we still remain in an uptrend so it would not surprise me to see sideways action," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
"If we were to have a set of earnings releases that were well off expectations to the downside, that could create hesitation in the market."
A few themes will dominate in the coming week: the outlook for China, the rotation to slower-growing stocks, and results from high-flying trading favourites.
S&P 500 companies' first-quarter earnings are projected to have increased 1.7pc from a year ago, Thomson Reuters data showed.
The forecast is down sharply from the start of the year, when profit growth was estimated at 6.5pc, but has climbed from a low of 0.6pc reached on Wednesday.
That jump occurred despite notable disappointments from IBM Corp and Google Inc.
The benchmark S&P index rose 2.7pc for the holiday-shortened week, helping the index recapture nearly all of the declines suffered in the previous week. The US stock market was closed for Good Friday .
Investors eyeing the impact of China's troubles on corporate America's bottom line will have a few spots to pick from, including Apple, Qualcomm and Yum Brands.