Stocks have been in a tentative mood lately in the run-up to the earnings season. And there is little on the docket that will cheer stocks today. If anything, the pressure could be to the down side.
On the economic front, we got import prices that were higher than expected, providing further fuel to the ongoing inflation debate. And the high trade deficit for February will likely be a drag on the first-quarter GDP growth numbers.
Also not helpful is the overnight news out of Japan, where regulators raised the severity of its nuclear crisis to the same level as the Chernobyl meltdown of the 1980’s.
And of course, we had so-so numbers from Alcoa (AA) after-the-close on Monday. The aluminum giant modestly beat on EPS, came out short on revenue, but provided a favorable outlook.
It is still early going on the earnings front and Alcoa’s results don’t tell us much on what to expect from other companies. We have a few major companies coming out with results later this week, such as J.P.Morgan (JPM), Bank of America (BAC), and Google (GOOG) that will give us a good flavor of what to look forward to. The only notable report from this morning is from Fastenal (FAST), a roughly $10 billion market-cap nuts and bolts supplier industrial customers, that beat on both EPS and revenue.
We are getting close to the stage when the market will find its true sense of direction. It will be the earnings reports that will give stocks that directional nudge. My bet is on an upward push to stocks, but we will find out definitively in the coming days.