(MoneyWatch) Just like clockwork, it's earnings season again. Now comes the moment when investors determine whether stocks have been rising primarily due to the central bank-spiked punchbowl (Japan upped its contribution last week) or whether companies are making money the old fashioned way: By selling the stuff they make or the services they provide.
Estimates for Q1 quarterly earnings of the companies that comprise the S&P 500 range from -0.7 to +1.5 percent, which is to say that earnings are unlikely to be stellar, this go-around. According to FactSet, companies have clearly telegraphed that this quarter would be more difficult. More than three-quarters of S&P 500 companies issued negative guidance about the upcoming quarter, above the 5-year average of 61 percent. If the final number is negative, "it will mark the second time in the past three quarters that the index has reported a year-over-year decline in earnings growth."
Despite the slow start, for all of 2013, earnings for the index are expected to hit a record of nearly $112 per share, up from $104 last year. If this quarter is expected to be a stinker, that means analysts are betting on a second-half bounce. That feat could be difficult if U.S. headwinds (payroll tax hike, sequestration, sagging employment) pick up; eurozone anxiety recurs; or Chinese growth stagnates. Then again, maybe the crystal ball gazers are transfixed on global easy money to make up the difference.
Markets: Stocks fell on the week, though improved from the lows seen just after thewas released on Friday -- by 10 a.m., the Dow was off about 170 points, but closed down just 40 points on the session.
-- DJIA: 14,565 down 0.1 percent on week, up 11.1 percent on year
-- S&P 500: 1,553, down 1 percent on week, up 8.9 percent on year
-- NASDAQ: 3,203, down 2 percent on week, up 6.1 percent on year (small company stocks down 3 percent on week, the worst showing since June 2012)
-- April Crude Oil: $92.70, down 4.7 percent on week
-- June Gold: $1,575.90, down 1.2 percent on week
-- AAA nat'l average price for gallon of regular gas: $3.61
THE WEEK AHEAD:
Alcoa - after close
7:30 NFIB Small Business Optimism Index
10:00 Wholesale inventories
10:00 Job Openings and Labor Turnover Survey (JOLTS)
President Obama sends fiscal 2014 budget to Congress
2:00 FOMC Minutes
Chain Store Sales
8:30 Weekly Claims
8:30 March Import Prices
JPMorgan Chase - before opening
8:30 March PPI
8:30 March Retail Sales
9:55 April Michigan Sentiment
10:00 February Business Inventories