As the first quarter of UK company results draws to a close, investors are eagerly anticipating the upcoming reports from some of the top retailers, Reuters reports.

These reports could offer valuable insights into the outlook for earnings and shed light on how consumers are faring.

This final wave of results might even impact the estimate for S&P 500 first-quarter earnings, potentially turning them positive on a year-over-year basis.

Throughout this earnings season, results have surpassed expectations by a significant margin.

Refinitiv data, based on reports from 457 of the S&P 500 companies as of Friday, along with analyst estimates for the remaining components, suggests that first-quarter S&P 500 earnings may have only declined by 0.6% compared with the previous year.

This estimate is a stark improvement from the projected 5.1% drop forecasted at the beginning of April.

Attention now shifts to this week’s anticipated reports

Jeffrey Buchbinder, chief equity strategist for LPL Financial, the largest independent broker-dealer in the US, said in a Monday note: “There’s plenty to worry about for the rest of the year… but the risk of an additional sharp contraction in profit margins has significantly diminished.”

However, the focus now turns to the reports expected this week, particularly from Home Depot, scheduled for early Tuesday, Target on Wednesday and Walmart on Thursday.

These retailers hold great significance as they provide clear indications of consumer trends.

Major retailers poised for success, specialty retailers face mixed results

Peter Tuz, president of Chase Investment Counsel, a boutique wealth management company owned by the Chase family and employees, predicts that larger retailers will likely perform well, while specialty retailers may experience a mix of positive and negative outcomes.

Last week, both the S&P 500 and Dow experienced losses. One of the contributing factors to this decline was the release of data on Friday, which revealed a six-month low in US consumer sentiment for the month of May.

Investors will closely monitor the upcoming retail reports to gauge the overall health of the economy, the resilience of consumer spending and the potential impact on stock market performance.