The major averages continue to show strength upon the launch of first quarter earnings reporting season. The Dow Jones Industrial Average (chart) closed the week up 1.8%, the Nasdaq (chart) also closed up 1.8%, the S&P 500 (chart) added 1.6% and the small-cap Russell (chart) 2000 led the charge by closing the week up a whopping 3.1%. The money center banks such as JPMorgan Chase NYSE: JPM (chart), Bank of America NYSE: BAC (chart) and Citigroup NYSE: C (chart) which reported their earnings late in the week did help continue the momentum we have recently seen in the markets.
The question now is can earnings reporting season which begin in earnest next week breakout this market to new highs? Companies that are scheduled to report next week are International Business Machines Corp. NYSE: IBM (chart), Morgan Stanley NYSE: MS (chart), Netflix NasdaqGS: NFLX (chart), Goldman Sachs NYSE: GS (chart), Discover Financial Services NYSE: DFS (chart), Intel Corp. NasdaqGS: INTC (chart), Intuitive Surgical NasdaqGS: ISRG (chart), Johnson & Johnson NYSE: JNJ (chart), TD Ameritrade Holding Corp. NasdaqGS: AMTD (chart), Yahoo! Inc. NasdaqGS: YHOO (chart), American Express NYSE: AXP (chart), Coca-Cola NYSE: KO (chart), Qualcomm NasdaqGS: QCOM (chart), Biogen NasdaqGS: BIIB (chart), E*Trade Financial Corp. NasdaqGS: ETFC (chart), General Motors NYSE: GM (chart), Microsoft Corp. NasdaqGS: MSFT (chart), Southwest Airlines NYSE: LUV (chart), Starbucks NasdaqGS: SBUX (chart), Visa Inc. NYSE: V (chart), American Airlines Group NasdaqGS: AAL (chart), Caterpillar NYSE: CAT (chart) and General Electric NYSE: GE (chart) just to name a few.
Without question the aforementioned earnings reports will play a significant role in whether the key indices will breakout to new highs or struggle at their current resistance levels. One other historic factor that can play into the mix is April tends to be one of the top performing months of the year. Whatever the case is, I think it’s safe to assume a breakout or possibly a breakdown is on the horizon. Good luck to all 🙂
~George