A focus on fundamentals is great investing advice but something of a challenge this earnings season. The trade war will overshadow and obscure most of what's contained in the profit and loss accounts.

More than 100 S&P 500 companies report financial results this week. Attention will be on guidance, and that's likely to be murky as chief executives hedge on the potential impact from tariffs.

Expect plenty to follow United Airlines' example and offer differing scenarios depending on whether trade barriers cause an economic slowdown, or not. If current policies don't change then the probability of a U.S. recession this year is 90% according to Torsten Sløk, chief economist at Apollo Global Management.

That means the clock is ticking on President Donald Trump's 90-day pause on planned reciprocal tariffs. The president looks to be in an uncompromising mood, posting on Sunday an eight-point 'non-tariff cheating' list which included currency manipulation and export subsidies. It's bad news for countries such as Vietnam -- a key manufacturing base for companies including Nike and Lululemon -- which were hoping to strike quick deals on the basis of zero tariffs.

Meanwhile, China on Monday warned countries against making trade deals with the U.S. that would hurt Chinese interests. The specter of an economic Cold War will haunt earnings statements.

Corporate bosses don't have control over such negotiations but it will be worth listening to Tesla CEO Elon Musk's comments when the electric-vehicle maker reports on Tuesday. A key Trump ally but also a noted tariffs-hater, Musk could provide a clue as to whether trade deals are on track.

For almost everyone else, this earnings season is likely to be a footnote to the trade-war wranglings.

-- Adam Clark

*** Join Barron's senior managing editor Lauren R. Rublin and deputy editor Ben Levisohn today at noon when they talk with John Hathaway, senior portfolio manager at Sprott Asset Management USA, about the investment appeal of gold and other precious metals. Sign up here.

***

Economic Reports This Week Highlight Conditions, Sentiment

Economists will get more data on consumer sentiment this week. The Federal Reserve will release the third of its eight Beige Books on Wednesday, with anecdotes describing economic conditions from its 12 regional banks. And the University of Michigan will publish its final reading of April consumer sentiment on Friday.

   -- The Beige Book might confirm what Chicago Fed President Austan Goolsbee 
      has been hearing: that businesses, especially in the auto sector, are 
      stocking up on products and inventory that might get more expensive under 
      President Donald Trump's tariffs after the 90-day waiting period expires. 
 
   -- Goolsbee told CBS's Face the Nation that buying activity might look 
      "artificially high" in the near term because companies are stockpiling 
      items in advance, and then activity during the summer could appear to 
      drop off from those artificial levels. 
 
   -- April consumer sentiment is expected to weaken again from its 
      lower-than-anticipated reading of 50.8 in the first two weeks of April, 
      according to FactSet. The index is down more than 30% since December amid 
      the trade wars, according to Director of Consumer Surveys Joanne Hsu. 
 
   -- Inflation expectations for the year ahead jumped to 6.7% in early April 
      from 5% in March, the highest reading since 1981, while long-run 
      inflation expectations climbed to 4.4% from 4.1% in March. Consumers 
      reported seeing higher risks of recession and unemployment increasing. 

What's Next: The International Monetary Fund is scheduled to release its World Economic Outlook on Tuesday, with projections expected to reflect the initial fallout of Trump tariffs. Also due this week are purchasing manager indexes offering a snapshot of manufacturing and services activity since the tariffs started.

-- Janet H. Cho

***

Also Coming This Week: Tesla, Tech Earnings Reports

This week brings earnings reports from Elon Musk's Tesla and technology firms Alphabet, Intel, and International Business Machines amid uncertainty around trade policy and the Trump administration's tariffs. President Trump said on social media Sunday that businessmen who criticize tariffs are bad at business and really bad at politics.

   -- Markets want more clarity after Trump postponed a decision on 
      country-specific tariffs until July. Wedbush analyst Dan Ives says 
      negotiations with China need to start immediately or the trade war will 
      inflict major damage to growth. Wall Street no longer cares about 
      "progress" comments, it wants "deals starting to be inked." 
 
   -- The Chicago Fed's Goolsbee told CBS that the tariffs announced on April 2 
      were definitely bigger than expected, and the administration's delay in 
      implementing them created more uncertainty. "We don't know 90 days from 
      now, when they've revisited the tariffs...how big they're going to be." 
 
   -- Musk and tech chiefs could talk about how tariff uncertainty is affecting 
      sales and strategic planning, but first-quarter earnings might not fully 
      reflect the top- and bottom-line impacts. Two Magnificent Seven stocks, 
      Nvidia and Amazon, are expected to be top five contributors to S&P 500 
      earnings growth, FactSet said. 
 
   -- Overall, the blended earnings growth rate in the first quarter for the 
      S&P 500 is 7.2%, according to John Butters, FactSet's senior earnings 
      analyst. Together, Mag 7 companies are expected to report earnings growth 
      of 14.8% for the first quarter, from a year ago, FactSet said. 

What's Next: Treasury Secretary Scott Bessent said last week that talks with Japan were progressing in a highly satisfactory direction. Talks with South Korea could kick off this week, with Korean officials in town for the spring meetings of the IMF and World Bank.

-- Liz Moyer

***

Spring Home-Sales Season Is Failing Expectations

Spring isn't shaping up to be the strong selling season real estate agents and home builders were hoping for. The inventory of available homes has increased, but houses are spending longer on the market, and more sellers are cutting prices to attract buyers.

   -- Affordability remains a challenge. Home prices remain high, and the 
      average 30-year fixed-rate mortgage hit 6.83% on Thursday. Nearly one in 
      10 mortgage applicants during the week ended April 11 sought an 
      adjustable-rate mortgage, the Mortgage Bankers Association said, the 
      largest share since November 2023. 
 
   -- Existing-home sales dropped to their lowest levels since the mid-90s in 
      2023 and 2024, National Association of Realtors data found. But this year, 
      consumers are more negative about job security, potentially holding off 
      on major purchases. Dallas area Re/Max agent Todd Luong says buyers are 
      hitting pause. 
 
   -- D.R. Horton, the nation's largest home builder, cut its full-year 
      guidance, saying buyers were more cautious than expected this spring. 
      Buyers in the market have "done their homework," prequalifying with a 
      mortgage company, and following through, Executive Vice President and 
      Chief Operating Officer Michael Murray said. 
 
   -- About 1.15 million homes were on the market in March -- up 19% from 2024, 
      and the most for any March since 2020, according to Zillow data. About 
      24% of listings reduced their prices, the most of any March since at 
      least 2018. 

What's Next: Leo Pareja, CEO of brokerage eXp Realty, suggests checking months of supply, a metric showing how long it would take to sell all listed homes at the current sales pace. More than six months of supply is a buyers' market, while less than six months means sellers have the power.

-- Shaina Mishkin and Janet H. Cho

***

Large University Endowments Facing Existential Threats

The business of overseeing a university endowment is no longer just a complex job managing billions of dollars. The Trump administration has canceled grants and other funding, and now there are proposals to raise the federal taxes endowments pay. The administration is even taking aim at Harvard's tax-exempt status.

   -- Endowments at private institutions from Notre Dame to Rice and Washington 
      and Lee face tens of millions of dollars in tax increases, while public 
      flagships such as the University of Texas face tens of millions in 
      federal funding cuts, according to a report in the Chronicle of Higher 
      Education. 
 
   -- That report analyzed 77 colleges and universities and concluded that 
      these schools, collectively, face $10 billion in potential additional 
      annual costs. For example, the Chronicle estimates that higher taxes and 
      funding cuts could cost University of Pennsylvania nearly $420 million 
      annually, or $16,000 a student. 
 
   -- Former President Barack Obama and former Treasury Secretary, Harvard 
      president, and current Harvard faculty member Larry Summers propose that 
      universities shore up their budgets by dipping into their endowments. 
      Harvard Management Co. suggests that some $15 billion is available for 
      that purpose. 
 
   -- The National Association of College and University Business Officers 
      counts 658 institutions with $873.7 billion in total endowment assets. 
      Harvard pays up to $50 million a year in federal tax on net investment 
      income. If the tax rises to 14% from its current 1.4%, that's closer to 
      $500 million. 

What's Next: Rep. Mike Lawler (R., N.Y.) has proposed raising the federal rate to 10% and lowering the per student endowment threshold to $200,000. And Rep. Troy Nehls (R., Texas) has proposed raising the tax rate to 21%, matching the federal corporate income-tax rate.

-- Andy Serwer and Abby Schultz

***

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