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This week, stocks have been plunging. Investors are hopeful that this year's spectacular rally will return during the impending earnings season.



Earnings Season May Bring Back The Weary Stock Market Surge

The surge in the stock market is weakening. Earnings season may bring it back.

This week, stocks have been plunging. Investors are hopeful that this year’s spectacular rally will return during the impending earnings season.

  • This article originally published in CNN Business’ Before the Bell newsletter. 

FactSet’s survey of analysts predicted that S&P 500 businesses’ first-quarter earnings would increase 3.1% over the previous year. That would be the third quarter in a row that earnings have increased. Profits for the entire year should increase by roughly 10.7%.

Despite heated inflation statistics and hawkish talk from the Federal Reserve prompting Wall Street to reduce its estimates for six interest rate cuts this year to three, the three major US indexes have set several new records this year following a stellar 2023.

Strong corporate earnings in the fourth quarter and a robust economy, according to some traders, have fueled confidence that the US will escape a recession, which has led to the market’s continuous rise.

However, just after recording the strongest start to the year since 2019, markets started to decline. Hot inflation statistics and cautions from Fed officials have caused the S&P 500 to drop 2% this week, as investors have become more concerned that long-awaited rate cuts may occur later than anticipated. Rising oil costs and high bond yields are also hurting the stock market.

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Some investors believe that the stock rise could pick back up steam during the first-quarter earnings season.

The market will eventually continue to function if we can see corporate earnings moving higher, according to Matthew Stith, director of equity research at Bartlett Wealth Management.

Next week marks the beginning of earnings season, with quarterly reports from Citigroup, BlackRock, JPMorgan Chase, Wells Fargo, and Delta Air Lines.

Investors will analyze the numbers to look for indications that consumer spending is still robust. Fears of a recession have subsided in recent months as the labor market continues to grow and interest rates remain at a 23-year high. However, lower-class consumers’ purchasing has decreased and Americans’ views about the economy have worsened, creating a mixed picture of the state of the economy.

“Earnings season is likely to show a bifurcated market where many companies are thriving, but an increasing minority are struggling,” wrote Yung-Yu Ma, chief investment officer at BMO Wealth Management, in a Wednesday note.

Friday morning’s release of the most recent jobs data will provide Wall Street a preview of the health of the economy. According to Factset, economists predict that the US economy added 200,000 jobs in March.

On the Baltimore bridge, workers who were Latino immigrants perished. More will probably reconstruct it.
Six Hispanic immigrant laborers perished while constructing Baltimore’s ill-fated Francis Scott Key Bridge last week.

“My colleagues Ramishah Maruf and Gloria Pazmino say that more Latino immigrants will almost probably join the push to reopen the vital transportation route once reconstruction work gets underway.”

According to the Bureau of Labor Statistics, Latino workers account for around one-third of the construction industry in the United States. This is a significant overrepresentation, given that Latinos make up just 19% of the country’s total population and 17.6% of its workforce. Over two thirds of Hispanic workers in the construction industry in the United States are immigrants.

There are plenty of openings in the construction industry and low entrance barriers for the millions of recent Latino immigrants living in the US. One way to achieve upward mobility is through stable construction jobs.

“We’re not just here trying to change our lives and achieve our goals and dreams. It’s also everyone we have left behind in our countries, we sustain them, we help them,” construction worker Reinaldo Quintero said to CNN. “We are the ones people call when they’re sick, when they can’t afford food.”


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