Monday, July 11, 2016

With Q2 results reporting after the bell today, Alcoa (AA Quick QuoteAA - Free Report) will once again unofficially ring in a new earnings season. While the aluminum giant may no longer be as relevant to the overall domestic economy and the equities market, the traditional early-week earnings report helps focus investors toward later in the week, when several of the big banks like JPMorgan Chase (JPM Quick QuoteJPM - Free Report) , Citgroup (C Quick QuoteC - Free Report) and and Wells Fargo (WFC Quick QuoteWFC - Free Report) .

According to Zacks Director of Research Sheraz Mian’s Earnings Preview last Friday, we are looking toward our 5th consecutive quarter of earnings recession. Total earnings are currently expected to be down 6.2% on -0.6% in lower revenues. Energy is once expected to provide the biggest drag on both top and bottom lines. Read Sheraz’s full article here.

Alcoa itself does not look to have a lot of Growth or Momentum currently, and shows a slight downward bias in analyst earnings estimate revisions ahead of today’s report. That said, last quarter Alcoa bested estimates by a whopping 250%, and a beat today would mark the third quarter in a row of positive earnings surprises.

The key to perhaps reversing the trend in this ongoing earnings recession could could from the big banks, who begin to report in the back end of this week. They are the main reason that although only 30 companies from the S&P 500 are reporting earnings this week, they make up a large percentage of the index’s overall market cap.

Mark Vickery
Senior Editor