Earnings Week

The current week is a big one for the Street, as many of the biggest companies release earnings. It's potentially make or break for the health of the market, as stocks have remained stagnant since the S&P jumped 47.48 points April 1st. Since then, the market has lost its gains, but seems to be waiting for news that will either propel prices back up, or slam them back down. This weeks earning announcements seem like the catalyst investors have been waiting for.
The disappointing earnings reported by bellwether General Electric (NYSE:GE) saw stocks plunge on Friday, a sign that investors are keenly watching earnings as a sign of how companies aer performing. Earnings are expected to increase 15.7% in 2008, which is a daunting figure. Earnings in 2007 were supposed to increase 14.5%, and are now thought of to have rose only 2.6%. If companies can't perform as expected, we could be looking at more declines and a continuation of this bear market. However, if earnings are reasonable, investors may be confident enough again to return to stocks, many of which are trading at a huge discount.
While there are many companies reporting this week, there are a few that I feel are the most important company reporting tomorrow, Wednesday April 16th:

• Wells Fargo & Co. (NYSE:WFC) reports Wednesday. The financial institution has been hit by subprime exposure and the overall liquidity crisis. They are the 8th largest member of the Money Center Bank sector, with a Market Cap of 90.9 Billion. Earnings are forecast for $.57 for the quarter, and $2.42 for the current year. 4Q 2007 earnings were $.41, and last years earnings were $2.38. Intraday price as of 2 pm Tuesday April 15 was 27.68, up 1.73% from previous close.
• The Coca-Cola Co. (KYSE:KO) reports Wednesday as well. The beverage producer has seen explosive growth from over seas and a weak dollar has helped exports. Expansion in developing markets, such as China, should have offset the weak economy in the US. KO is doing much better than most stocks, its down .81% in 2008. However, this earnings report will show if the economic contraction at home is cutting into KO's profitability more than expected. Expectations from analysts are $.62 per share.
• JP Morgan Chase Co (NYSE:JPM) reports on Wednesday. The financial giant that recently purchased Bear Sterns Cos at a huge discount has seen its share price sky rocket since the acquisition. However, the buy out could have hurt profits this quarter. JPM is expected to post earnings of $.64 earnings per share. Meeting the expectations could show that JPM did not sacrifice large amounts of money to make the purchase, and position it as the premiere financial company. A miss could be seen by investors as a sign of weakness, though investors might forgive a miss because of the recent Bear Sterns buy out.