On Wednesday, equity markets recovered from Tuesday’s sell-off but have yet to regain their recent peaks. The reopening of plays on the eve of the peak earnings season fueled the turnaround. The first-quarter earnings season begins today, and the action will be intense for the next two weeks. The danger for the market is that average earnings growth would be weaker than the consensus estimate, leading to a market correction. Intel, Mattel, and Old Dominion Freight Lines are among the companies with earnings results to watch.
Despite increasing signs of rising inflation from S & P 500 companies, the economic outlook remains optimistic. Today’s calendar contains main reports on unemployment, housing, and the index of leading indicators, all of which can shift the sector. On Friday, investors will be looking for Markit’s flash PMI readings and any insights they can provide into the global economy. If the S & P 500 can reach a new high this week, it will continue to rise well into the summer.