It will take months for the real trends to develop, and I still don't think it will be good. Last week saw a jobs report that seemed to confirm moderate growth and inflation worries. Next week we'll see reports on retail sales, consumer and producer prices, as well as manufacturing and business inventories. (See graphic below)
Look for some downbeat news, but don't be surprised if the market rallies a bit by taking it as a sign of reduced inflation. The truth is that the increased costs at the start of the production process (labor, materials) are going to be running into weakening consumers and/or inflation. Either way that is bad news for both profits and the economy.
Most first quarter results will have to wait another month (and this is where the bad news may really hit the fan). For the coming week though a few big names are reporting (see chart below). Goldman Sachs draws my eye; the investment bank has been on a tear the last few years and I expect them to stumble in the next twelve months -- possibly starting now. Mark my words!
