The much anticipated US 4th quarter earnings season kicks off this week with eight companies on the S&P 500 due to report results.
Banks unofficially get the ball rolling with giants, Wells Fargo and JPMorgan reporting results on Friday.
A number of banks have already warned that the US tax reform passed late last year could hit their fourth-quarter income.
Airline Delta, Lennar (a leading US homebuilder) and BlackRock, the huge global fund manager, are among other companies providing quarterly updates over the week.
Morgan Stanley says it will take a $US1.25 billion hit in its fourth-quarter earnings due to a cut in corporate tax rate as part of the US tax code overhaul.
Rival Goldman Sachs Group warned last month that it expects its fourth-quarter earnings to fall by about $US5 billion due to repatriation tax, the cost of moving money from foreign countries to the US and the negative impact on its tax-deferred assets.
The impact of the US tax changes and what companies do with the cash windfalls and any negative impact on balance sheets will be the focus for this reporting season and not the underlying performance of many reporting companies – although the likes of Netflix and Apple will see their numbers closely watched.
