Earnings season: Visa and Mastercard to provide spending insight

The earnings season powers on at full throttle in the US and Europe. Despite the earnings surprise ratio in the S&P 500 Index having declined now to 75 percent (based on 256 reported earnings) from 83.3 percent earlier this week it is still one of the strongest US earnings seasons since 2001, driven by strong performance among financials and technology companies. The biggest positive surprisers have been Goodyear Tire, DR Horton and Amazon.com.

In Europe the surprise ratio is 55.6 percent reflecting a more difficult business environment with the biggest negative surprises coming out of the consumer staples and technology sectors.

Next week the most important earnings releases will come from Visa and Mastercard, the world's two largest payment solution providers, expected to report on Wednesday. Their earnings will give insight into consumer spending across a wide spectrum of goods and services, including information on consumer spending in emerging markets. Both companies have exited the "Great Recession curve" with high speed and transaction volume is growing healthily on a global basis and especially in emerging markets. This has translated into stellar stock performance since the beginning of 2009. Earnings per share is expected to climb 22.3 and 23.3 percent year-over-year for Visa and Mastercard respectively.

You can view all of next week's earnings releases including estimates and three month changes in estimates in the attached PDF.