Earnings have been the biggest story so far this week, and the story has not been that encouraging.
After the stock market’s big gains in 2013, investors are looking to earnings growth to justify high valuations, but unfortunately there have been disappointments in quite a few high-profile cases for one reason or another.
IBM dropped more than 3% after weak server sales led to a seventh straight quarterly decline in revenue. As it often does, Big Blue did a good job protecting earnings, though, managing to beat forecasts for profit. Luxury handbag producer Coach slid more than 6% after an earnings and revenue miss, though United Technologies and Norfolk Southern both advanced on the strength of their quarterly results.
Earnings continue tomorrow with Microsoft, McDonald’s and Starbucks amid the big names we will be hearing from, and we have a busy day on the macro front for the first time this week in the US. Jobless claims will kick things off before Wall Street opens, followed by the ‘flash’ PMI manufacturing reading for January, December’s existing home sales, the Federal Housing Finance Agency’s house price index and the index of leading indicators for December from the Conference Board.
Despite the heavy flow of earnings this week so far, price movements of the overall stock market have been quite slight. There is enough on the plate in terms of potential catalysts tomorrow to suggest that could be about to change though.