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This will either make stock rally sizzle or snap

Despite the naysayers, earnings could put more sizzle into the stock market's bull run this summer.

In the week ahead, the first major reports of the second-quarter earnings season will begin to trickle out, with Alcoa on Tuesday and Wells Fargo on Friday.

"We've had very good gains, for the most part supported by earnings, or anticipated earnings growth," said Tobias Levkovich, chief U.S. equity strategist at Citigroup.

"What we're going to need to hear managements say in their quarterly releases is that they're comfortable with the outlook. The good news is preannouncements are down from what they had been in the past quarter. They seem relatively comfortable with the second-quarter number. The real question is will they cut guidance for the second half."

Stocks marked the Fourth of July holiday week with record-setting gains. The Dow crossed the 17,000 level for the first time, and the S&P 500 set a string of records on its trek toward 2,000. The Dow had its best week since mid-April, gaining 1.3 percent to a record 17,068, and the S&P 500 was up 1.3 percent at 1,985. The Nasdaq was at a fresh 14-year high of 4,485 with a 2 percent gain, and the Russell 2000 rose 1.6 percent to a record 1,208.

"We're looking for second-quarter (earnings) to be up about 7 percent," Levkovich said. "One would argue the market has already picked that up and the market is reflecting that." He said the consensus for the second half is 10 percent earnings growth.

Wall Street expects S&P 500 earnings to rise 6.1 percent for the second quarter, based on the few companies that have reported and expectations for the many that have not, according to Thomson Reuters.

Read MoreWhy Cramer is downplaying Dow 17,000

Financials are expected to be the weakest, showing a profit decline of 2.7 percent and technology is expected to show the best returns of 12.3 percent profit growth.

Earnings, if they disappoint, certainly could be a negative catalyst this summer. "It's earnings results, but far more important is the forward view," Levkovich said. "Our sense is the economic data is going to be relatively healthy."

Besides earnings, there are a few key releases in the week ahead, most importantly the minutes from the Fed's June meeting on Wednesday. There are weekly claims data Thursday, as well as trade data, and several Fed speakers.

Traders on the floor of the New York Stock Exchange.
Getty Images
Traders on the floor of the New York Stock Exchange.

The Fed came into focus after the June jobs report, with speculation rising that it may need to move sooner to raise short-term rates if the economy keeps improving. That report showed a surprise gain of 288,000 nonfarm payrolls and the unemployment rate down to 6.1 percent.

Mark Zandi, chief economist at Moody's Analytics, said it's unlikely the Fed will come off the sidelines until this time next year, but that would change if job growth continues to build.

"If we continue to get these kind of job numbers, they're going to have to change the trajectory for interest rate hikes," he said.

Levkovich said the Fed could become a real focus for the stock market as it reaches the end of its quantitative easing program. As the Fed gradually winds down its bond buying, the market could start to see a change in tone, as investors look forward to the onset of the Fed's first rate hike.

Read MoreJob growth picks up, and so does talk of rate hikes

"We could be sitting here in the third quarter or fourth quarter, where everybody's focused on the Fed and the market could run into volatility," he said.

Anticipating the Fed's step back from easing has not been a good strategy, since stocks have continued to make gains, Levkovich added.

"I think in general, investors are still relatively cautious. They've missed the rally in most cases and are still struggling with that. What if the market melts up? It's a concern. I thought it would melt down earlier and it didn't," he said.

The Treasury holds auctions of the three- and 10-year notes and the 30-year bond on Tuesday through Thursday. Yields moved higher in the past week, both before and after the jobs report. The 10-year ranged from 2.51 percent early in the week to a high yield of 2.69 percent Thursday.

Read MoreCramer trades jobs blowout: 'Get more aggressive'

"It's a big move, but it's not a game-changing event apparently," said David Ader, chief Treasury strategist at CRT Capital. "We're accommodating another piece of strong data. We'll look at it in the context of supply ... I think that the weakness we've had so far this week is more about the calendar than nonfarm payrolls."

Ader said he expects the 10-year yield could trade as high as 2.70/2.75 percent.

The Fed minutes on Wednesday could create some volatility for markets, as central bank officials may disclose some of their discussion on the return to normalcy, and analysts note they do not agree.

"We expect the FOMC minutes to be more hawkish than the public comments made by Chair Yellen, who has clearly been on the dovish side of the monetary policy spectrum, " wrote Deutsche Bank economists.

What to watch

Tuesday

Earnings: Alcoa, Bob Evans, The Container Store

7:30 a.m.: NFIB small business survey

10:00 a.m.: JOLTS

1:00 p.m.: $27 billion three-year note auction

3:00 p.m.: Consumer credit

Wednesday

Earnings: WD-40, MSC Industrial, Texas Industries

7:00 a.m.: Mortgage applications

1:00 p.m.: $21 billion 10-year note auction

2:00 p.m.: FOMC minutes

Thursday

Earnings: Family Dollar, Progressive, Barracuda Networks, Chevron (preliminary), PriceSmart

8:30 a.m.: Jobless claims

10:00 a.m.: Wholesale inventories

1:00 p.m.: $13 billion 30-year auction

1:15 p.m.: Kansas City Fed President Esther George

Friday

Earnings: Wells Fargo, Infosys, Fastenal

2:00 p.m.: Federal budget

2:45 p.m.: Atlanta Fed President Dennis Lockhart, Chicago Fed President Charles Evans

—By CNBC's Patti Domm

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • CNBC Senior Commodities Correspondent and Personal Finance Correspondent

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.