Do quarterly results even matter? Investors had been anticipating a fairly tough set of reports prior to the most recent earnings season, but they bid up stocks throughout March anyway. When those reports rolled in across April and early May, the numbers (and outlooks) were quite good — and stocks stumbled badly anyway. It’s as if investors didn’t care.

Of course, quarterly results do matter. It’s only that  events such as the Greek economic crisis dictated the market action this past spring. Now, the European crisis is no longer boiling rather just simmering, which should enable investors to focus more squarely upon — and respond to — quarterly reports.

My take: the numbers should be fine. 

Analysts have been steadily lowering their second-quarter forecasts, and the newly-lowered bar will be stepped over once again by many companies. It’s the forward view that should give you pause. Three months ago, many companies noted that business was holding up reasonably well, considering the global headwinds in place. Credit went to a still-solid U.S. economy.

This time around, there’s much less reason for cheer. As I recently noted, an important indicator, the CFNAI, is flashing red. And as we saw on Friday, July 6, the U.S. economy is creating fewer new jobs than was the case a few months ago. 

Will earnings season be another period of misery? Not necessarily. U.S. corporations have shown a great deal of resilience thus far, and may be able to maintain profit margins near current record levels. Still, I’ll be watching the companies that report early in earnings season. What they have to say may set the tone for the rest of the earnings season.  

The four on my radar:

1. Alcoa (NYSE: AA) 
Reports after the market close on Monday, July 9

Alcoa’s quarterly numbers aren’t all that important. They will be tepid — at best — which is already reflected in the stock price. But Alcoa’s management delivers a lengthy global commentary on the company’s quarterly conference call, and you can glean a great deal of current economic and industrial trends taking place across the world. 

2. JP Morgan Chase (NYSE: JPM) 
Friday, July 13

Investors will finally get a clear sense of the depth of the bank’s trading losses due to ill-conceived hedging and derivative strategies in Europe. If the damage is not as bad as feared, shares may move back toward or past $40, where they stood two months ago. Equally important, JP Morgan will be the first major bank to discuss current trends in the financial services sector. 

This is a tricky sector for investors: Risks abound, but current valuations are quite low. (As an aside, Citigroup (NYSE: C) reports second-quarter results after that weekend, on Monday, July 16.)

3. IBM (NYSE: IBM)
Wednesday, July 18

This company’s report is important for two reasons. First, its massive global presence will help us understand current trends taking place in China, Brazil, Europe and elsewhere. Second, IBM will give a clear read on the current appetite for spending on information technology (IT). The second half of the year often brings a stepped-up pace of IT spending as chief information officers (CIOs) opt to spend their allocated funds as part of the year-end “budget flush.” Yet these CIOs have a lot of discretion and sometimes choose to cancel spending plans, saving budgeted funds for some future date. IBM is likely to focus on this issue.

4. GE (NYSE: GE) 
Friday, July 20

Though earnings season will be fully underway by this point, GE’s commentary always has the possibility to move the markets. With exposure to aviation, health care, finance, infrastructure, clean energy, security and a few other niches, GE will reset investor expectations for many of these industries. GE’s shares are near a three-and-a-half year high, which may imply that investors anticipate a fairly bullish quarterly report and outlook.  

Risks to Consider: There are so many mine fields out there, led by a seemingly slowing U.S. economy, that the risks are too numerous to mention. You’ll need to keep a close eye on the market and economic developments throughout this earnings season, as well as the summer, in order to get a clear idea of how to position yourself for the rest of the year.

Action to Take –> Note earnings season is just a snapshot in time, and if the coming earnings season is downbeat, it doesn’t necessarily portend even tougher times ahead. After all, things looked pretty bleak last summer but seemed to rebound by the fall and winter. So if we have any sort of deep sell-off, then it may prove myopic as the next rebound could still be around the corner, just as was the case in 2010 and again in 2011.

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