In the end this would give a setback limited to 11

Alcoa will give the traditional kick-off of the ball of the quarterly results this week, in the United States. A ball that investors hope without false note, markets having become much more nervous since mid-June. The indices still played the yo-yo, last week, registering a net decline Thursday on the monthly us employment report: the CAC 40 lost 0.32, signing its fourth weekly decline. The Dow Jones gave 1.87 in four days (Friday as public holiday).

The results and especially the perspectives given by companies will be scrutinized with a magnifying glass, as analysts prepare still in a difficult quarter (the eighth in a row in the Red), a better end of the year. Consensus provides a retreat for 35.5 of the profits of the & S P 500 in the second quarter, $ 127.8 billion. The profits of the ten sectors of the U.S. market are expected in decline, which would make this the worst quarter since Thomson Reuters collects this data in 1998. Health should display the less stronger decline (-2), while materials, and financial and energy are expected to see their profits collapse of more than 50.

However, the consensus hope that an improvement will emerge in the second part of the year: after a new deterioration in profits in the third quarter (-20,9), professionals build on a rebound to 182,9 for the last quarterly accounts, the fourth quarter of 2008 was particularly difficult. In the end, this would give a setback limited to 11.2 on the year and an increase of 26.7 in 2010.

Signs encouraging optimism, forecasts of companies on the second quarter were, for the time being at least, less negative than in the same period a year earlier. At the same time, the rate of downward revisions slowed in recent weeks (including through the removal of General Motors of the S & P 500 index), contributing to the rally of recent months. In June, the ratio of the revisions upward than downward became positive, according to PrimeView, and, for the first time since October 2007.

The caution will remain appropriate

This disillusionment on the results could be heavily punished and the market will be particularly sensitive to the words of the future business leaders. The recent progress of enhancement of markets, and in particular of the cyclical sectors, leaves little room for disappointment. And, as the spring flight (the S & P 500 has climbed by 32.5 since March 9) is made in low volumes. "The companies provided less information: they have either expanded their range of forecasts, either refused to give"guidances".".

Caution should be development in the speech from the companies, which will not encourage analysts to revise substantially to increase their projections of results, noticed makers of Aurel, which add: PER 12 months (ratio price/earnings, giving the enhancement, Editor's note) main stock indexes is at a near level from that observed before the crisis. Light PER downwards adjustment could be done by the price.

Most managers and strategists are thus relatively safe on the evolution of the awards this summer. Even if a severe decline seems unlikely according to them, many do not exclude a correction up to 10 to 15. The market still expected volatility.

Beyond the results, investors will follow also this week a few data macroeconomic agenda, in particular the ISM non-manufacturing, Tuesday, and then the confidence of consumers, Friday, in the United States, expected in growth and stable. As the rally was focused, in large part, by indicators of confidence, investors hope now confirmation of improvement directly in the "hard" economic statistics. Finally, operators monitor the statements on reform of the financial system and the global recession at the Summit of the G8 (also read our information pages 6 and 7).