At the opening of today's markets, 240 companies in the S&P 500 had reported quarterly earnings.
Thus far, it's been a productive earnings season. The performance of equities for current retirees is perhaps more important than ever, as many advisors are using stocks and dividend paying stocks to supplant fixed-income and money-market funds, which lag due to low interest rates.
At Monday's opening bell, 68 percent of companies to have reported beat estimates, 11 percent met estimates, and 21 percent missed estimates.
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Market analysts are watching corporate earnings closely this season. The Fed's reduction of monthly bond purchases threatens a market slowdown. A strong earnings season in spite of the Fed's unwinding may signal that the stock market is capable of standing on its own without the Fed's intervention. Corporate earnings determine the value of dividend checks, which are issued relative to the earnings per share.
Expectations were lowered for the first quarter results going into this earnings season. The protracted winter resulted in slack economic activity. Analysts were projecting a one percent earnings growth for large-cap companies.
This week will be another busy week, as another 120 S&P companies will report earnings. Twitter reports on Tuesday and could lead or halt a broader tech sell off. Dug companies Merck and GlaxoSmithKline and energy companies Exxon Mobil and Chevron will also report.
The markets will also have to absorb the results of a Fed meeting. The Fed is expected to continue tapering $10 billion from its monthly bond-buying program, but is not expected to take other action.
Perhaps the biggest news to markets will be when the jobs reports is released Friday. Some analysts are speculating that a positive jobs report could adversely affect bond markets. Payrolls improving beyond expectations could mean the Fed will move sooner to raise interest rates. The Fed has repeatedly made it clear that it is watching jobs numbers and increases in wages as indications of inflation.
Markets are also absorbing greater geopolitical uncertainty, as tensions in the Ukraine mount and the White House issued a new round of sanctions against prominent individuals close to Russian president Vladimir Putin.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
