World week ahead: Greece fears rise, US earnings season gathers momentum

The threat posed by Greece beyond its borders may have diminished but efforts to agree on an economic reform programme to free up bailout funds and avert default will capture world attention this week.

Eurozone finance ministers meet in the Latvian capital Riga on Friday with both sides saying time is running short to keep Greece afloat. But with Athens yet to produce a programme of reforms that is deemed acceptable, there is little confidence they will pull off a deal.

Germany said last week it was unrealistic to expect euro zone countries to be able to pay out a new tranche of aid this month.

"No one has a clue how we can reach agreement on an ambitious programme," Finance Minister Wolfgang Schaeuble said.

Greek Prime Minister Alexis Tsipras, elected on a promise to end austerity, is balking at politically sensitive reforms of the pension system and labour markets and a privatisation program to which his predecessor had agreed.

Athens is dangerously close to running out of cash.

Officials told Reuters it will need to tap all the remaining cash reserves across its public sector – a total of €2 billion – to pay civil service wages and pensions at the end of the month.

Greece must pay almost €1 billion in May to the International Monetary Fund.

Earnings season gathers momentum
Investors attempting to determine whether US equities will rebound from Friday's selloff or continue to sink will look to a deluge of earnings this week for a clearer picture.

The S&P500 index on Wall Street dropped 1.1% on Friday, its biggest decline since March 25 and wiping all the gains this year.

Honeywell International and General Electric took hits from the strong dollar, while concerns over new trading regulations in China and Greece's place in the euro zone dented sentiment.

Since hitting a high of 2119.59 on February 25, the S&P has held in a range of about 80 points. Investors have grown concerned about the impact of a strong dollar on quarterly results.

Results are expected from companies including Amazon.com, General Motors, Boeing and Morgan Stanley.

According to Thomson Reuters data, of the 59 companies in the S&P 500 that have posted earnings to date, 74.6% have topped profit expectations, above the 70% rate for the past four quarters and 63%  since 1994.

Early returns on revenue have been disappointing, however, as 45.8% of companies have topped estimates, well short of the 58% rate for the past four quarters and 61% since 2002.