Corporate earnings: Tomorrow, the deluge

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With Citigroup's ( C ) decisive earnings win this Monday morning, traders have finally made up their mind as to how they feel about this earnings season , and they feel good. Still, the trickle of earnings we have seen so far amounts to little more than a last minute forecast. Tomorrow, the levee breaks, and that trickle becomes a flood. Here are the most significant reports to watch for, and what they will mean to the market.

Comerica ( CMA ): Though not among the biggest banks, Comerica's business still covers nearly every base in the banking sector. If Wells Fargo ( WFC ) and Citigroup have primed the market to expect good things from the big boys, a win from Comerica may raise enthusiasm that the good news will reach a broader swathe of the market.

CSX ( CSX ): Most train stocks have had a good year, so far, and the heavy transportation industry has been looked to as a leading economic indicator for more than 100 years now. No indicator is a guarantee, but there is something to this. Common sense says that more traffic on rails means companies have increased orders for materials, and those materials will be made into goods, which means they will be made into profits. If the market sees good news here, it will take it to mean that America's industrial/manufacturing resurgence is alive and well.


Cintas ( CTAS ): Cintas is a uniform company, and as such, it is often looked to as an indicator of the health of the service side of the economy, for much the same reason transportation stocks are looked to an indicator of industry and manufacturing. CTAS stock fallen noticeably away from its highs in the last few days, an indication the Street's confidence in an earnings win is low. This one certainly bears close watching.

Goldman Sachs (GS): The expectation has already been set that the banking sector will do well this earnings season, but expectation can always be turned on its ear.

Intel (INTC): Intel is not everything it once was, but it is still a megalith in the semiconductor industry and the king of the CPU. Recent good times for the semiconductor industry have caused a general feeling of optimism across the entire technology sector. Intel can either keep that going, or throw a nasty wrench into the system.

JP Morgan Chase (JPM): Much like Goldman Sachs, JP Morgan Chase it very much a bellwether for the investment banking industry. The Street will be looking particularly at the mortgage side of the business, which has been weak in recent quarters. It is expected to be weak again, but how weak will give the Street a picture of how things are going in the real estate market.

Johnson and Johnson (JNJ): So, we've covered banking, industry, the service sector, technology… what have we left out? The consumer, of course. Johnson and Johnson provides American households with a huge array of products and medicines. If the Johnson and Johnson is healthy, the consumer is too.

Yahoo! (YHOO): Sadly, Yahoo isn't really an indicator of anything, and is on the list mostly for its history than anything else. Lose your edge in technology, and you don't necessarily get to buy it back, no matter how much you spend.  

Taken together, these earnings reports will paint a much clearer overall picture of the economy than we have at present. As long as they are predominantly positive, the good times should continue to roll for investors. Wall Street tends to have a sixth sense about these things, so those invested in stocks right now are probably well advised to sit tight.

Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC .


This article was originally published on MarketIntelligeneCenter.com



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Earnings , Economy

Referenced Stocks: C , CMA , WFC , CSX , CTAS

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