The US December quarter and 2015 earnings season cranks up in the coming shortened week with around 130 companies scheduled to report and a smattering of reports coming from companies in Asia, the UK and Europe.
The reports will come at a tough time for markets – two losing weeks to start the year, investor confidence gone and replaced by suspicion and volatility. So expect a nasty sell-off should a higher flyer disappoint.
And first up tomorrow night there’s that very opportunity when streaming video giant, Netflix reports its December and 2015 figures.
Anything less than exceeding market forecasts will be seen as a miss, and quite a few analysts reckon the high flyer will be ht by higher costs and lower subscriber growth in the US market.
The importance of Netflix’s report will only be matched by reports from other tech giants next week in Apple, Google (Alphabet) and Amazon – the so-called FANG stocks that dragged Wall Street higher in late 2015, but are now helping push it down again.
The prospect of four straight quarters of earnings declines is staring investors in the face on top of the worst multi-week selloff for stocks in years, and the worst start of the year ever.
For the first two weeks of this year, the Dow Jones Industrial Average and the S&P 500 index are down at least 8%, and the Nasdaq Composite Index shed more than 10% and is in correction.
Total earnings for the S&P 500 in the fourth quarter are expected to decline from the previous year, even factoring the fact that Wall Street forecasts’ have been lowered, sharply in a number of cases.
Early estimates also see first-quarter earnings for the S&P 500 falling from the same quarter of 2015.
Several companies on the S&P 500, along with seven Dow groups, report quarterly results this week.
Among companies reporting are: on Tuesday, Bank of America, Advanced Micro Devices, Netflix and UnitedHealth Group Inc and IBM; Goldman Sachs Group Inc. on Wednesday; Verizon Communications Inc, American Express Co, Resmed and Travelers Cos on Thursday; and General Electric on Friday.
Foreign companies incoude Hyundai Motor, Hyundai Engineering, Logitech, Singapore Exchange, Canadian pacific, Kia Motors, Keppel Corp and Sap.
