NEW YORK (Reuters) - The upcoming earnings season May Not Be The time for investors to buy aggressively, Because this year's winners Already Reflect Optimism earnings.
The first-quarter reporting period ", Which Begins Monday With results from aluminum company Alcoa Inc. (AA.N), Follow Three months of solid gains Stocks That Have Brought close to two-and-half-year highs.
Some gains in anticipation of Have Been a strong earnings season, particularly for The Energy and Other Sectors cyclical, analysts Said, raising questions about whether this quarter's reports Will Be Enough To Keep the recent uptrend intact.
Stocks Have Been Going up "in anticipation of earnings That Are Going To Be Real What the consensus expecting IS Basically," Said Ken Fisher, chairman and CEO of Woodside, California-based Fisher Investments, marriages Which $ 43 trillion.
Some investors see in The Rise and Other Energy Stocks That Benefit When The economy starts to recover and have Unsustainable Have Been paring back positions.
"We believe commodity inflation IS Probably near a peak ace Is The interest level in Many deeper cyclical" including The Energy Sector, Said Tom Galvin, a managing director and lead portfolio manager at Columbia Management in Stamford, Connecticut, Which has about $ 6.5 billion in assets Under management.
Overall, first-quarter earnings for S & P 500 companies are Expected To Have Increased 11.4 Percent From A Year Earlier, goal that's down from a Slightly forecast of 13 percent on April 1, is based Thomson Reuters data.
Strategists Fear Higher Costs commodity "could dampen results for consumer-related companies as well as" Those in industries With heavy fuel Costs Such as transportation.
Profit margins are Expected to Drop to 13.8 Percent In The First Quarter from 8.41 Percent In The Fourth Quarter, According to Charles Blood, senior market strategist at Brown Brothers Harriman.
The Energy Sector far surpassed Other Sectors In The First Quarter.The Standard & Poor's Energy Sector Index (. GSPE) Was up 16.3 percent in The Quarter, Compared With The list overall S & P's gain of 5.4 percent, and Oil Prices are at 2 1/2-year highs.
"During the fourth-quarter reporting period", The S & P 500 (. SPX) Gained about 3.6 percent.
Revisions to earnings Analyst Estimates Ahead of the reporting period "That view stand That IS Anticipating strong Wall Street gains In The Energy Sector instant credit report.
Since January 1, The Energy Sector has-been revised up The Most, With icts Expected growth rate for The Quarter rising to 9.25 percent from 5.11 percent, According to Thomson Reuters data.
On The Other End Of The Spectrum, the telecommunications Sector "has been" revised down-the most, falling to -3.4 percent from 7.5 percent.
Beside Alcoa top names reporting next week are JPMorgan Chase & Co (JPM.N), Bank of America Corp. (BAC.N) and Google Inc. (GOOG.O).
Fisher, Who Sees The Market Mostly flat this year, Will not Be Exceeded expectations Said In The upcoming earnings period "as They Were in recent quarters.
"Some Will shoot the lights out - the obvious question IS $ 64,000 Which ones," he said.
"If you like Materials, You'd Better Be Careful Which ones. The easy days of just buying Materials and riding it free, that's Two years old now."
Other agreements That Much Of The earnings Optimism IS Already in the Market. That May Set up a dynamic similar to The Fourth Quarter reporting period ", When only companies that far surpassed expectations rose after reporting results Substantially.
"People are very, very Cautious about underweighting (the energy sector) Because If You Were That underweight Sector in the Past couple of quarters, you underperformed," Said Natalie Trunow, senior vice president and chief investment officer of equities at Calvert Asset Management Company in Bethesda, Maryland. IT manager about $ 14.8 Billions in assets.
"There Is So Much Optimism around energy, I'm just not sure That It's Not Already priced in, and for Materials Likewise," she said. The S & P Materials Sector (. GSPM) WAS up 4 Percent In The First Quarter.
Some, however, are sticking With The Trends That Have WORKED. Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont, he Said Recently added to historical gold position. Gold Prices Have Been trading at all-time highs.
S & P 500 earnings reports Have Been beating expectations in recent quarters, With about 70 percent coming in ahead of Wall Street profit views, Compared With Roughly 60 percent Typically, Thomson Reuters data showed.
(Reporting by Caroline Valetkevitch, Editing by Andrew Hay)
