Q4 Earnings Take A Breather For MLK Day

This is Mark Vickery covering for Sheraz Mian, who will be out of the office until Wednesday.

With the U.S. stock markets closed today for the holiday honoring Dr. Martin Luther King, Jr., this is a good time to reflect on the Q4 earnings season started recently and take a peek forward at what investors might expect coming down the pike in the coming weeks.

Aside from a typically favorable earnings report out of Intel (INTC) last week, most numbers from the big names reporting thus far for Q4 can, in aggregate, be considered zero-sum at best: for every earnings beat in homebuilding from a company like Lennar (LEN), there was a big miss from a KB Home (KBH).

Similarly, in finance, Goldman Sachs (GS) and Bank of America (BAC) performed better than expected, but Citigroup (C) and JPMorgan (JPM) decidedly did not. Going back even further in the quarter — prior to Alcoa’s (AA) sound earnings beat — Nike (NKE) topped estimates but FedEx (FDX) missed.

Overnight, stocks were sent plummeting on first the Shanghai then the Hang Seng markets after the China Securities Regulatory Commission reported that a dozen trading firms violated rules on margin trading. Allowing investors to delay making margin repayments, among other infractions, pushed the Shanghai composite down 7.7 percent — its biggest fall in more than six years — which led to Hong Kong’s Hang Seng index falling 1.5 percent.

This comes in the wake of falling home prices in China and an overall understanding that the Chinese economy is stumbling a bit as 2015 unfolds. Low global oil prices have stoked trepidation among investors that economies in China, Japan and Europe are struggling and will continue to do so, which in turn might weigh on the U.S. economy. So far, however, we’ve only seen evidence of this occurring on Wall Street, not so much on Main Street.

Q4 earnings season picks up again tomorrow, when we get reports before the market opens from companies as diverse as Delta Air Lines (DAL - Analyst Report), Morgan Stanley (MS - Analyst Report), Johnson & Johnson (JNJ - Analyst Report) and Halliburton (HAL - Analyst Report). After the bell Tuesday we look forward to the earnings report from Netflix (NFLX - Analyst Report).