Now that investors know that March was a miserable month for jobs, they will turn their attention to earnings. First quarter earnings results from Corporate America and what CEOs say about the business outlook could dictate what’s next for the stock market.
But don’t hold your breath.
So far, the experts aren’t too optimistic. Many companies have already made “pre-announcements” warning that their numbers will fall short. There are five times as many negative announcements than positive ones. And S&P 500 earnings are expected to increase only 1.6 percent in the first quarter compared to a year ago.
We’ll get our first look at the season on Monday. That’s when Alcoa kicks things off with its first quarter results. The aluminum giant is always the first Dow component stock to report right after the market close and its results often set the tone for the earnings season. Analysts have substantially cut their estimates for Alcoa. The consensus estimate is now 10-cents a share—down from 13-cents a few months ago—but flat compared to a year ago.
I’ll be interviewing Alcoa CEO Klaus Kleinfeld on Monday right after the company releases its numbers at 4 pm ET. I’ll be asking him about Alcoa’s businesses and how things look going forward. When I talked with Kleinfeld in January he said even though aluminum prices are way down, Alcoa is benefiting from a pick-up in three U.S. businesses: aerospace, autos and construction. Is that still holding up? I’ll also ask him whether strength in the U.S. will be enough to compensate for very slow growth in Europe and China where Alcoa has a big base of operations.
Investors are hoping Alcoa will shine on Monday. If it does, it could give a boost to Alcoa shares—down almost 10 percent in 2013—and maybe even lift up the overall stock market.
Be sure to tune in on Monday to Nightly Business Report to find out.