The focus at the weekend will shift towards the health of the US corporate sector, as banking heavyweights JP Morgan and Wells Fargo kick off the first quarter earnings season across the Pond.
Nonetheless, any reaction is likely to be constrained given the depleted trading volumes around the Easter break.
The ‘bottom-up’ consensus for S&P 500 earnings per share stands at $37.29, having been savaged by 7% over the past three months, which was more than twice the typical 3% pre-earnings season cut, according to strategists at Bank of America-Merrill Lynch.
That would be equivalent to a 2% decline in EPS versus a year ago and mark their first drop since the EPS recession of 2015-16, BofA-ML said.
However, there might be a silver lining to be had.
Historically, in situations such as the above, earnings had then gone on to outstrip analysts’ estimates by 3%, they added.
In terms of US data, the import price index for March is set for release at 1330 BST, followed by a preliminary reading on consumer confidence in April from the University of Michigan.
Chinese data will also be in focus, with a report on the Asian giant’s foreign trade due out overnight, possibly alongside the latest money supply and credit data.
For JP Morgan Chase‘s results, Michael Hewson at CMC Markets UK told clients there was potential for another set of disappointing earnings.
Already in the previous quarter, the lender’s profits had come in short of analysts’ estimates, for the first time in 15 quarters.
And during the first three months of 2019 the Treasury yield had inverted a tad at one point.
The consensus forecast for JP Morgan was for adjusted EPS of $2.37 after the $1.98 seen over the previous three-month stretch.
Friday April 12
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INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Import and Export Price Indices (US) (13:30)
Industrial Production (EU) (10:00)
U. of Michigan Confidence (Prelim) (US) (15:00)
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