Monday, April 11, 2011
With no major economic report on the calendar today, stocks will likely remain in a tentative mood ahead of the start of the earnings reporting season later today. Alcoa (AA), the aluminum giant, kicks off the first-quarter earnings season after the close of trading today.
Being first out the gate gives Alcoa a lot more air time than would be warranted by its role in the econonomy. The aluminum giant’s results will tell us little about the quality of earnings by the rest of corporate America, but a positive report will nevertheless be a good start. Estimates for Alcoa’s earnings have been inching up in recent days, with the Zacks Consensus estimates currently at 27 cents for earnings and $6.1 billion in revneue.
We get reports from more consequential firms later this week when Bank of America (BAC), JP Morgan (JPM) and Google (GOOG) come out with their quarterly results.
With dividend reinstatements in the banking group now in the rearview mirror, quarterly results will likely show a continuation of the improving trend in asset quality and capital ratios, offset somewhat by soft loan growth and declining net interest margins. Comments from the bank CEOs about the health of the economic recovery will be very significant.
We start the earnings season today, but we don’t get into the thick of things till next week. The early reports will nevertheless provide a flavor of what to expect in the coming days.
Sheraz Mian
Director of Research
Zacks Investment Research
