Welcome to the first-quarter earnings season. On Monday, investors get their first glimpse of the quarter when aluminum producer Alcoa Inc. releases its earnings after the close of trading. They are expected to fall from last year's results.
"Corporate America is going through its first earnings recession since the tech-bubble burst in early 2000," said Vincent Delisle, strategist at Scotia Capital, adding that Canadian and U.S. earnings are embarking upon different paths because of Canada's exposure to strong commodities.
He believes that S&P/TSX composite earnings, on a per share basis, are set to grow 13.7 per cent in the first quarter, versus a decline of 6.5 per cent for companies in the S&P 500.
If declining U.S. earnings are built in to the market already, then investors may be willing to add to the gains already enjoyed since U.S. indexes touched a near term low in mid-March. As well, investors will be reacting to news from the Wall Street Journal that Washington Mutual Inc. may be set to receive a $5-billion (U.S.) investment from a private equity firm, which would relieve concerns about the financial health of the country's largest saving and loan company and remove one more source of stress on credit markets.
Stock market index futures pointed higher prior to the start of trading. Futures for the Dow Jones industrial average for 38 points, to 12,679. Futures for the broader S&P 500 rose 11 points, to 1383.
In Europe, the U.K.'s FTSE 100 rose 0.9 per cent and Germany's DAX rose 1 per cent. In Asia, Japan's Nikkei 225 rose 1.2 per cent.