In keeping with tradition, airlines and major banks will be the first to report their financial results for the past three months. Friday is expected to be busy with Delta Air Lines, JPMorgan, Wells Fargo, and Citi all scheduled to report, followed by Goldman Sachs and Morgan Stanley on the following Tuesday.

According to FactSet's forecasts, companies in the S&P 500 index saw their revenues grow by 3.1 percent in the year-over-year comparison for the October to December period. This marks the 12th consecutive quarter of growth; however, the pace of growth lags behind inflation, tinting the outlook with concern.

Sector-wise breakdowns indicate that, as per analysts' expectations, revenues grew in eight of the eleven sectors of the S&P 500 compared to the previous year, with financial companies showing the most significant increase.

In terms of profit,

analysts expect the S&P 500 companies to report a modest average increase of 1.3 percent in earnings.

At the end of September, analysts still anticipated an 8 percent increase in profit, but predictions have since been revised downwards due to concerns about an economic slowdown.
Five of the eleven sectors are expected to report a year-over-year increase in earnings, led by communication services, utilities, and non-essential consumer goods. In contrast, six sectors are projected to have decreased profits, with the most significant declines in the energy and healthcare companies.
It's important to note the performance of individual sectors can be significantly affected by one or two large corporations. The communication services sector is expected to post a 41.6 percent increase in profits, but without Meta's performance, this would be only 25 percent. The non-essential consumer goods sector is hoped to see a 23 percent profit increase, which would turn into a 3.2 percent drop without Amazon. The expected 20.3 percent decline in the healthcare sector’s results would shrink to 1.2 percent without Pfizer, Merck, and Moderna.

The S&P 500's 12-month forward P/E ratio is 19.2, which is higher than both the five-year (18.9) and the ten-year (17.6) averages. At the end of the second quarter, this figure was only 17.8. This suggests that S&P 500 stocks have become more expensive in recent months relative to earnings per share.

Following the modest growth in the last quarter of last year, a steep improvement in corporate results may be forthcoming. Analysts are currently expecting a 6 percent increase for the first three months of this year compared to the same period in 2023, with an anticipated profit growth of 11.8 percent for the entire year.