U.S. earnings season kicks off on Monday

Aluminium producer Alcoa (aa.) kicks off the Q4 U.S. earning season next week and expectations are high with most analysts pencilling in average S&P 500 earnings growth of 30% plus.  So the markets should be particularly dynamic next week on both sides of the Atlantic. It seems unlikely that companies will miss their earnings from 2010 and therefore expect some positive momentum in the DOW and S&P 500 which will spill over to Europe.

There is so much to worry about though, the rise in commodity prices will inevitably feed back into higher inflation so interest rates will have to start rising eventually. The combination of rising interest rates and stagnating growth isn't a particularly enticing concept to look forward to. I reiterate my point again that 2011 is about stock picking and trading not buying and holding.