Markets
The Week Ahead: Big Banks Open Earnings Season, Then CPI, Retail Sales and PPI
JPMorgan, Goldman Sachs, Citigroup and Wells Fargo report on Tuesday, Bank of America and Morgan Stanley on Wednesday — the same morning as September's CPI. Retail sales and producer prices follow on Thursday.
The third-quarter earnings season starts in earnest this week, and it lands in the middle of the most important run of US economic data this month. Here's the schedule, and why the timing matters.
Monday, October 12 is Columbus Day in the US. The stock market is open, but the bond market is closed, which usually means thin trading. Canada is closed for Thanksgiving.
On Tuesday, October 13, JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo report before the US open. JPMorgan is the bellwether: analysts expect earnings of about $5.90 a share, up roughly 16% from a year earlier, on revenue of about $51.3 billion. On Wednesday, October 14, Bank of America and Morgan Stanley follow. Bank results matter beyond the sector because they offer a direct read on consumer spending, loan demand, credit quality and dealmaking. JPMorgan's shares have been drifting lately: they closed Friday at $332.99, below their late-summer highs above $360.
Wednesday also brings the September consumer price index, at 8:30 a.m. ET. Forecasts compiled ahead of the release point to headline inflation rising to about 3.6% year on year from 3.4%, with core inflation, which excludes food and energy, near 2.5%. On Thursday, October 15, retail sales and the producer price index for September are due, along with the Philadelphia Fed manufacturing index. The Fed's Beige Book, a survey of regional business conditions, comes out on Wednesday afternoon.
The combination is what makes the week tricky. With the 10-year Treasury yield at 5.24% and oil above $100 a barrel, an inflation surprise could move yields sharply — and on Wednesday morning bank shares will be reacting both to their own results and to the CPI number at the same time. Our new guide explains how earnings season works and how to read a company's results beyond the headline 'beat' or 'miss'.