European bourses may tread water at best next week as the first-quarter earnings season draws to a close, with no convincing signs that the bottom line for companies will pick up anytime soon.
Top names queuing up to update the market include German conglomerate Siemens, Swiss food giant Nestle, chipmaker ST Microelectronics, tyre titan Michelin, and carmakers PSA Peugeot Citroen and DaimlerChrysler.
The European stock market was closed yesterday and will also be closed on Monday for Easter, with Wall Street also closed yesterday but reopening on Monday.
A flurry of mixed results this week - with heavy cost-cutting and restructuring paying off only for selected companies - came to remind investors that demand and profits are far from great and visibility muddied, as consumer spending, the backbone of the economy, continues to weaken.
"Markets are now entering a sort of neutral zone as the end of the Iraqi war makes people slightly more optimistic, but it is still impossible to say when sales and profits are going to pick up again," said Lex Werkheim at Eureffect asset management in Amsterdam.
Some strategists also warned that geopolitical worries could easily take the upper hand again if tensions between the United Stated and Syria deteriorated further.
On Monday, senior US officials threatened sanctions over charges that Damascus supported terrorism, was harbouring Iraqi leaders and developing chemical weapons, but Washington later toned down its rhetoric, saying it had no "war plan" to attack Syria.
The technology sector will remain in the spotlight with ST Microelectronics and French software group Dassault both due to publish their first-quarter earnings on Wednesday and Thursday respectively.
"There is still a great deal of uncertainty marring the technology sector and it doesn't look like there has been an improvement in visibility. I would be surprised if second quarter results showed material improvement," said ING Barings' technology, media and telecoms fund manager Simon Hallet.
Sentiment in the sector next week will be tied to what kind of figures US powerhouses, such as telecoms gear maker Lucent, come out with and how they see business in the forthcoming months.
"Markets are slowly starting to take into account that first half earnings won't be good. What they need to know now is whether there are signs that they will start picking up in the third or fourth quarter of the year," said strategist Jean-Francois Cauvet from Paris-based broker E.T.C.
On Tuesday, French supermarkets chain Casino will unveil its first-quarter revenues. Other blue chip names due to report include appliance giant Electrolux, and components maker Schneider, building materials company Saint-Gobain, Dutch bank ABN AMRO and advertising group WPP.
Investors will be on the lookout for the latest batch of US economic data, particularly the University of Michigan's final confidence survey for April, out next Friday, which markets hope will show a noticeable improvement now that the uncertainty linked to the conflict in Iraq has been lifted.
Economists polled by Reuters forecast the index would improve to 84.2 from 77.6 in March.
Yet economic fundamentals remain frail with consumers still reluctant to loosen their purse strings and companies unwilling to increase investments for the time being.
The US Federal Reserve's Beige Book summary of US economic conditions will also come under intense scrutiny when it is released late on Wednesday.
Doubts about economic growth continued to push investors to safe-haven bonds and gold, which firmed again on Thursday.