There is no shortage of market moving events for investors in the coming week - from Egypt unrest to inflation data - but the biggest shape-shifter would be a continuation of the recent burst of disappointing earnings.
Equity markets were rattled in the past week by a series of corporate reports that ran counter to the widespread view that all is well with revenues and profits, with some firms starting to struggle with rising cost pressures and wary consumers.
Focus will fall on a heavy European schedule that includes the likes of Barclays, AXA, BNP Paribas and Volvo. The past week saw investment bank Credit Suisse and leading spirits group Diageo miss expectations, while US tech giant Cisco Systems Inc beat projections but with disappointing margins.
European companies, in particular, are having a hard time meeting the market expectations set for them. Data from Thomson Reuters StarMine shows that with a third of STOXX 600 quarterly reporting done, 54 percent of companies have missed analysts' target. It compared with only 25 percent for the US S&P 500. Colin McLean, chief investment officer of SVM Asset Management, said most of the weakness has been related to consumer sentiment and rising prices.
This will mean investors look beyond the bottom line to underlying pressures. "It will be more than the actual result, (instead) looking at the impact of oil prices and food prices," he said. All of which means that the coming week's inflation and growth data, along with a G20 meeting at the end of the week, plus continuing questions about Egypt and the Middle East, threaten to make markets skittish. A quick glance at the performances of various asset classes so far this year, points to how inflation expectations have come to dominate some investor thinking.
Among the top gainers is the S&P GSCI soft commodities index, which has a total return of nearly 11 percent, reflecting the rising cost of food. At the other end of the scale, however, is MSCI's emerging market stock benchmark, which has lost more than 5 percent. Some of this is because of the impact of food price rises on emerging market inflation and the potential for monetary tightening as a result.