Stocks have been tumbling this week, and investors are hoping that the upcoming earnings season will help bring back the year’s banner rally. Analysts expect S&P 500 companies’ first-quarter earnings to grow by 3.1% from the previous year, marking the third straight quarter of earnings growth. Full-year profits are expected to swell by around 10.7%. Despite hot inflation data and hawkish Federal Reserve chatter forcing Wall Street to pull back its expectations for interest rate cuts, all three major US indexes have notched repeated record highs this year after a successful 2023.
Some traders credit strong fourth-quarter corporate earnings and a resilient economy for fueling optimism that the US will avoid a recession, leading to the market’s continued surge. However, stocks began tumbling after notching their best start to the year since 2019. Concerns about long-awaited rate cuts being delayed, as well as elevated bond yields and spiking oil prices, are contributing to the decline. The upcoming first-quarter earnings season is expected to possibly fuel the stock rally once again, as investors look for corporate earnings to continue moving higher.
Earnings season is set to kick off next week with updates from major companies such as Delta Air Lines, Citigroup, BlackRock, JPMorgan Chase, and Wells Fargo. Investors will be closely watching these reports for clues about the strength of consumer spending. While recession fears have waned in recent months, concerns about decreased spending among lower-income consumers have emerged, providing a mixed picture of the economy’s health. Wall Street will also be keeping an eye on the latest jobs report to gauge the economy’s strength, with economists predicting the addition of 200,000 jobs in March.
A group of six Latino immigrant workers tragically fell to their deaths while working on Baltimore’s Francis Scott Key Bridge. Latino workers constitute about a third of America’s construction industry, despite making up just 19% of the overall population. Construction jobs offer low barriers to entry and plentiful opportunities for recent Latino immigrants in the US, providing a stable path to upward mobility. Many workers see their jobs not only as a means to achieve personal goals and dreams but also as a way to support family members back in their home countries.
Disney is taking steps to reduce password sharing for its Disney+ streaming service in an effort to boost signups and revenue. CEO Bob Iger announced that Disney+ will start cracking down on password sharing in certain countries in June and more broadly in September. Hulu, another streaming service owned by Disney, has also begun limiting account sharing outside of households. The move comes in response to Netflix’s successful crackdown on password sharing last year, which led to a significant increase in signups. Disney hopes that a similar approach will help their streaming platform move towards profitability.
