The earnings season for major corporations is kicking off—what signals will it send to the market?

Earnings season has arrived. Given that most macroeconomic data paint an overall uncertain outlook—dampening market sentiment—equity markets may benefit from the clarity provided by corporate earnings reports. JPMorgan Chase’s earnings report is typically the first major release of the season. JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup will all report their fourth-quarter results together. This first wave of earnings will deliver critical signals about banks’ financial performance and offer a clearer picture of how banks plan to succeed in 2024—a point of particular importance, as regional banks faced headwinds last year, marked by rising interest rates and substantial deposit outflows. More broadly, markets broadly anticipate only modest growth in aggregate corporate earnings, underscoring the likelihood of slight profit contractions across many companies in 2024. However, since the emergence of AI-related enthusiasm, investors have been chasing mega-cap tech stocks—meaning this remains a market focused more on rate cuts than on earnings.

Global highlights next week: U.S. earnings season officially begins; investors focus on CPI data

Concerns about an economic recession have intensified recently—especially after three U.S. banks collapsed consecutively last month, prompting some economists and investors to warn of a broad-based 'credit crunch' that could push the U.S. economy into recession. Although U.S. equity markets withstood the direct shock of the banking turmoil—and major indices posted solid gains in March—U.S. Treasury yields have fallen sharply. Moreover, federal funds futures traders now expect the Federal Reserve to initiate a series of rate cuts by year-end. Yet several Fed officials have stated they do not foresee any cuts before year-end. Over the past week, economic data have shown early signs that the previously red-hot U.S. labor market is beginning to cool. Investors are weighing whether this is a positive development—potentially encouraging Fed policymakers to halt further tightening—or a negative signal, possibly foreshadowing a sharper-than-expected slowdown in the U.S. economy. Tom Hainlin, Senior Investment Strategist at U.S. Bank, noted that if next week’s CPI data remain 'hot,' it would reopen the door for another Fed rate hike—pressuring risk assets. The bank advises clients to slightly reduce equity exposure, anticipating that higher rates would weigh on consumer spending and corporate profits. Friday’s nonfarm payroll report showed that the U.S. added 236,000 jobs in March (seasonally adjusted), with the unemployment rate holding steady at 3.5%—broadly in line with expectations—and boosting market bets on a Fed rate hike in May. Ian Lyngen, Head of U.S. Rates Strategy at BMO Capital Markets, wrote that—setting aside next week’s CPI data—the March employment report reveals the latest state of the labor market and clears the path for another 25-basis-point Fed rate hike in May. Next week also marks the official start of the U.S. equity market’s Q1 2023 earnings season: TSMC will report earnings on Thursday, followed on Friday by more U.S. firms—including BlackRock, Wells Fargo, Citigroup, and JPMorgan Chase—releasing their prior-quarter results. Wall Street expects S&P 500 constituents to report a second consecutive quarter of declining profits, with Q1 earnings projected to fall 6.8% year-on-year—the steepest decline since Q2 of fiscal year 2020. Goldman Sachs strategists recently forecast that investors will focus on four key themes during the reporting period: the outlook for profit margins; references to artificial intelligence; whether corporate cash usage is slowing; and the extent to which China’s economic recovery is boosting corporate performance.

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Sherwin-Williams is set to announce Q3 2026 earnings with analysts forecasting a 2% EPS increase to $3.66, despite recent revenue stagnation. Current analyst ratings suggest a Moderate Buy with a potential 20.6% upside.

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