×

Coming up this week in business: Profits, a gut check on the economy, and the world in view

    Good morning. Good markets. Welcome back to the week ahead on Wall Street and a look at what investors need to know.

    So where did that Trump rally go? After lighting up the big board, the stock market has gone sideways for the past month, raising questions about the durability of the surge that began after Donald Trump won the November election.

    There are a few things happening this week that could push the market one way or the other.

    Cash dollars
    Athit Perawongmetha | Reuters

    It's all about earnings

    The moment the market has been waiting for really gets moving, as some of the titans of corporate America tell us how much money they've made this year. Collectively, companies in the S&P 500 are expected to show profit growth of 9.2 percent, according to FactSet.

    Why it matters: With the market stuck in neutral, investors will get more insight into what the future holds. So instead of just looking at bottom-line numbers, pay close attention to what the CEOs are saying.

    Business sentiment is running high. This week's earnings numbers will show whether all that optimism is merited.

    Goldman Sachs
    Brendan McDermid | Reuters

    Who's on tap?

    It's a potpourri across a multitude of market sectors.

    On Monday, there's Netflix; Tuesday brings more financial titans, including Bank of America and Goldman Sachs; Wednesday's got American Express and eBay to show us what consumers are up to; Thursday includes more big bank names including Citigroup and Visa, while Friday is the all-important General Electric report.

    Earnings season is off to a good start, with nearly three-quarters of companies beating analyst estimates. But remember, it's all about the future.

    Growing pains

    So everyone thought this was going to be a year of breakout growth for the U.S. economy. Benefits would now transfer from the stock market to regular folks, as consumers started spending all that extra money that workers were going to be making.

    At least for the beginning of 2016, the story's been a little more complicated and considerably less rosy.

    Last week saw some disturbing news, like an unexpected decline in both spending and inflation, the latter indicating that companies have been having a hard time getting consumers to pay higher prices.

    This week will offer some more clues as to whether the generally high level of optimism will be matched by hard numbers showing progress.

    Of particular note: On Wednesday, the Federal Reserve releases its periodic update on business conditions across the country. Thursday will see more Fed data, this time from the Philadelphia Fed specifically on what's happening on the ground. Then Friday will bring more housing numbers, this time about houses that are sold but the sales haven't been finalized yet.

    Last week closed with the Atlanta Fed telling us that the economy, as measured by gross domestic product, may have grown only 0.5 percent in the first quarter. But Wall Street is still staying optimistic that things will pick up this year.

    "This week's data should continue to point to an economy that is picking up steam in the wake of the U.S. presidential election," said Joe LaVorgna, chief U.S. economist at Deutsche Bank.

    And then there's always the rest of the world

    Stocks took the global tumult pretty rough last week, knocking 138 points off the Dow on Thursday heading into the holiday weekend.

    The global bomb-dropping and saber-rattling could continue to be a destabilizing market force, so it's always a good idea to watch the headlines but not overreact.