The trading tone is subdued in the early going, which was the case even before Goldman Sachs (GS) and Citigroup (C) posted their first quarter results.
We can't attribute the lack of conviction to a hangover effect of watching Tiger Woods win the Masters for a fifth time considering that victory was wrapped up around 2:30 p.m. ET. Accordingly, we'll attribute it to the hangover effect of watching the stock market wrap up another winning week last week with a reassuring earnings-related move on Friday.
That move left the S&P 500 up 16% year-to-date, which is nearly as remarkable as, well, Tiger Woods winning another major championship.
The S&P 500 now sits above the 2900 mark, and some think that sets the stage to make a run at the all-time high. At this stage, there isn't a lot of reason to doubt that thinking since there hasn't been any meaningful shift in the market narrative that has gotten the S&P 500 back to this point from its December 24 low, which was 556 points, or 23.7%, ago.
There is hope still that the U.S. and China will reach a trade agreement that removes tariffs; there is hope still that the Fed will stick to the sidelines and not raise interest rates this year; and there is hope still that earnings growth will pick up again in the back half of the year.
On a related note, Goldman Sachs and Citigroup picked up where JPMorgan Chase (JPM) left off on Friday in reporting better-than-expected earnings results for the first quarter. The reaction to their reports, however, has been far more muted for a few reasons: (1) neither bank reported any yr/yr revenue growth and (2) both banks made big moves on Friday in response to the JPM report.
Shares of Dow component Goldman Sachs are down 0.9% in pre-market action while shares of former Dow component Citigroup are up 0.4%.
Those mixed reactions characterize the mixed state of the futures market, which is pointing to a relatively flat start for the major indices.
Earnings news will be a focal point this week and the next several weeks.
Bank of America (BAC) reports tomorrow before the open along with Blackrock (BLK), Johnson & Johnson (JNJ), and United Health (UNH). CSX Corp. (CSX), IBM (IBM), Netflix (NFLX), and United Continental (UAL) round things out after Tuesday's close.
Other luminaries reporting later in the week include Morgan Stanley (MS), PepsiCo (PEP), Alcoa (AA), Las Vegas Sands (LVS), American Express (AXP), Danaher (DHR), Honeywell (HON), Schlumberger (SLB), Taiwan Semi (TSM), Travelers (TRV), and Union Pacific (UNP).
The first quarter consensus EPS growth estimate has been revised to -4.3% from -4.5% last week. That's an upward revision for those keeping score at home, and in all likelihood, the first quarter estimate is likely to continue to be revised upward as the earnings season progresses.
Typically, the final growth rate is three to four percentage points better than the final estimate in front of the earnings-reporting period.
The Empire State Manufacturing Survey for April, meanwhile, showed a nice upward push to 10.1 (Briefing.com consensus 9.0) from 3.7 in March with a pickup in new orders helping to drive things. The dividing line between expansion and contraction for this regional manufacturing survey is 0.0.
There wasn't much reaction in either the futures market or the Treasury market to this report, which isn't uncommon. In any event, it's still a positive data point that will flow into the second quarter growth outlook.
As a reminder, this week is a short week. Markets will be closed Friday in observance of Good Friday, yet there is a good bit of earnings news and economic data that will be released along the way that should make for an interesting week, notwithstanding this morning's subdued tone.