What's going on?

US companies will begin unveiling last quarter�s results this week � and even though they�re expecting another drop in profits, investors are pretty �idgaf� about the whole situation.

What does this mean?

The fourth quarter of 2019 was dogged by trade tensions, which may partly account for the anticipated 1.6% profit drop compared to the year before. A particularly strong fourth quarter in 2018 means that drop looks worse than it is � though profits also fell in the third quarter, making this twice in a row.

Investors can count on a few sectors being hit: industrials were in the thick of trade disputes, while profits at consumer discretionary companies (which sell things people want but don�t need) are expected to fall 14% from 2018. That�s largely driven by General Motors: it warned that a strike could make a $2 billion dent in its profit.

Why should I care?

The bigger picture: �\_(?)_/�
With the US-China trade deal (finally) set to be signed on Wednesday, investors aren�t too bothered about last year. They�re expecting much cheerier news in the year ahead, and hoping 2019�s interest rate cuts will feed through to a more profitable 2020. According to Bloomberg, analysts are expecting US companies� profits to grow over 9%, with energy, industrials, and materials firms at the forefront. But since much of that profit growth may already be baked into those companies� stock prices, investors will be inspecting forecasts over the next few weeks to make sure their optimism isn�t misplaced.

For markets: Banks step up to the plate.
Earnings season will start with a bang � sorry, with the banks: JPMorgan Chase, Citigroup, and Wells Fargo all report on Tuesday. Investors watch banks� earnings closely as they tend to reflect the overall health of the economy (tweet this). Lower interest rates have reduced the amount banks make from each loan, but they�ve also fueled demand for loans: analysts expect profits to grow 6% compared to the year before.