How
corporate
America
is
handling
sticky
inflation
and
the
prospect
of
higher
interest
rates
will
be
top
of
mind
for
investors
in
the
week
ahead,
after
this
week’s
choppy
moves.
The
bull
market
is
on
edge.
The
Dow
Jones
Industrial
Average
and
S
&
P
500
registered
their
second
straight
losing
week
after
a
hotter-than-anticipated
March
consumer
price
index
report
weighed
on
the
interest
rate
outlook
for
investors.
Markets
are
now
pricing
in
two
rate
cuts
starting
in
September,
CME
FedWatch
Tool
shows,
instead
of
the
three
rate
cuts
starting
in
June
investors
held
in
their
base
case
prior
to
the
CPI
report.
Troubling
signals
are
abounding
as
well.
Treasury
yields
are
surging,
with
the
benchmark
10-year
yield
back
above
4.5%.
Oil
prices
are
on
the
rise,
with
Exxon
Mobil
hitting
an
all-time
high
amid
escalating
tensions
in
the
Middle
East.
Safe
haven
gold
is
spiking,
with
consumers
heading
to
their
local
Costco
stores
to
snap
up
gold
bars
.
The
Cboe
Volatility
Index
(VIX)
,
commonly
referred
to
as
the
fear
gauge,
has
crept
back
up
to
levels
last
seen
in
October
2023. Parts
of
tech
are
outperforming,
though,
with
Apple
notably
closing
out
the
week
with
a
4%
advance.
.VIX
YTD
mountain
VIX
Next
week
will
bring
more
information
that
could
add
to
the
recent
choppiness.
The
first-quarter
earnings
season,
which
kicked
off
Friday,
will
give
Wall
Street
insight
into
how
businesses
expect
to
weather
an
environment
of
elevated
interest
rates.
Elsewhere,
more
macro
data,
such
as
U.S.
retail
sales,
will
give
insight
into
how
the
consumer
is
handling
the
pressure
of
higher
prices.
“I’m
a
little
concerned
with
all
the
cross
currents,”
Bob
Doll,
chief
executive
of
Crossmark
Global
Investments,
told
CNBC’s
“Squawk
on
the
Street”
on
Friday.
“When
the
[price-to-earnings
ratios]
are
over
20,
things
better
be
nearly
perfect.
And
when
you’re
not
getting
the
rate
cuts,
you
can’t
sustain
the
PE,
and
then
if
earnings
become
a
question
mark,
that
will
cause
a
lot
more
people
to
ask
questions,”
Doll
added.
To
be
sure,
many
investors
expect
that
markets
can
absorb
the
likelihood
of
fewer
rate
cuts
this
year
so
long
as
the
Federal
Reserve
does
not
take
a
suddenly
hawkish
view
and
decide
to
put
rate
hikes
back
on
the
table.
As
it
is,
markets
have
managed
to
rally
this
year,
even
as
the
expectations
for
rate
cuts
have
eased.
First-quarter
earnings
season
underway
The
corporate
earnings
season
kicks
into
high
gear
in
the
week
ahead.
Investors
are
expecting
this
first-quarter
earnings
season
will
show
which
businesses
are
able
to
continue
withstanding
higher
pricing
pressures,
as
well
as
the
upcoming
refinancing
cycle.
“Earnings,
this
quarter,
next,
will
be
so
telling,”
said
Wolfe
Research’s
Rob
Ginsberg.
“If
they
show
no
signs
of
deterioration,
we
probably
just
consolidate
and
power
on,
but
if
they
start
to
exhibit
some
weakness,
that’s
when
you
worry
about
stagflation.”
“That’s
not
a
great
backdrop
for
stocks,”
he
added.
Ginsberg,
who
anticipates
a
4%
to
6%
consolidation
in
equities,
said
the
pullback
could
be
worse
if
fundamentals
show
signs
of
weakening.
Investors
broadly
anticipate
larger
companies
with
robust
balance
sheets
will
weather
the
pricing
pressure,
but
many
worry
that
small-cap
companies
that
may
have
more
debt
on
their
balance
sheets
could
get
hurt
by
elevated
interest
rates.
This
week,
the
small-cap
Russell
2000
is
on
track
for
a
losing
week,
down
by
more
than
1%.
Next
week’s
results
from
major
banks
Bank
of
America
,
Goldman
Sachs
and
Morgan
Stanley
will
likely
take
on
greater
significance
for
investors
given
JPMorgan’s
disappointing
net
interest
income
guidance
this
week.
Results
from
a
succession
of
regional
banks,
which
may
have
higher
credit
reserves
and
greater
exposure
to
real
estate,
will
also
attract
scrutiny.
Dow
component
UnitedHealth
will
also
be
reporting
results
next
week.
Overall,
analysts
expect
S
&
P
500
companies
to
have
grown
earnings
by
more
than
3%
from
the
year-earlier
period,
FactSet
data
shows.
If
that’s
the
case,
it
will
mark
the
third
straight
quarter
of
earnings
growth
for
the
benchmark.
Consumer
in
focus
Next
week
will
also
bring
a
raft
of
economic
data
that
could
give
insight
into
how
the
consumer
is
holding
up
—
following
the
hotter-than-expected
CPI
for
March
as
well
as
signs
of
weakening
consumer
sentiment.
The
March
U.S.
retail
sales
data
set
to
release
Monday
is
expected
to
show
a
deceleration
from
the
prior
month.
Economists
polled
by
FactSet
anticipate
a
rise
of
0.4%
last
month,
down
from
a
0.6%
increase
in
the
previous
reading.
“[Consumer
health]
is
a
big
thing
for
us.
It’s
something
we
think
looks
OK,
but
if
we
see
a
change
in
employment
trends,
or
if
we
see
that
the
consumer
does
fall
behind
because
their
weighted
average
cost
of
debt
really
starts
to
impair
their
spending,
that
could
have
kind
of
broader
consequences,
we
think,
for
the
market,”
said
Robert
Haworth,
senior
investment
strategist
at
U.S.
Bank.
“And
so,
we
remain
hyper-focused
there.”
Elsewhere,
Haworth
said
he
will
be
reviewing
the
first-quarter
growth
data
out
of
China
to
gain
insight
into
the
state
of
global
manufacturing. An
improvement
there,
he
anticipates,
will
add
credence
to
higher-for-longer
interest
rates
from
the
Fed.
“So,
the
market
will
be
paying
attention
to
that,”
he
said.
Week
ahead
calendar
All
times
ET.
Monday,
April
15
8:30
a.m.
Empire
State
Index
(April)
8:30
a.m.
Retail
Sales
(March)
10
a.m.
Business
Inventories
(February)
10
a.m.
NAHB
Housing
Market
Index
(April)
Earnings:
Goldman
Sachs
,
Charles
Schwab
,
M
&
T
Bank
Tuesday,
April
16
8:30
a.m.
Building
Permits
preliminary
(March)
8:30
a.m.
Housing
Starts
(March)
9:15
a.m.
Capacity
Utilization
(March)
9:15
a.m.
Industrial
Production
(March)
9:15
a.m.
Manufacturing
Production
(March)
Earnings:
J.B.
Hunt
Transport
Services
,
United
Airlines
,
Morgan
Stanley
,
Johnson
&
Johnson
,
Bank
of
America
,
Bank
of
New
York
Mellon
,
UnitedHealth
Group
,
Northern
Trust
Wednesday,
April
17
2
p.m.
Fed
Beige
Book
Earnings:
Las
Vegas
Sands
,
CSX
,
Discover
Financial
Services
,
Prologis
,
U.S.
Bancorp
,
Citizens
Financial
Group
Thursday,
April
18
8:30
a.m.
Continuing
Jobless
Claims
(04/06)
8:30
a.m.
Initial
Claims
(04/13)
8:30
a.m.
Philadelphia
Fed
Index
(April)
10
a.m.
Existing
Home
Sales
(March)
10
a.m.
Leading
Indicators
(March)
Earnings:
Blackstone
,
D.R.
Horton
,
KeyCorp
Friday,
April
19
Earnings:
American
Express
,
Procter
&
Gamble
,
Fifth
Third
Bancorp
,
Schlumberger
NV
