Bank Earnings and Inflation Data

Estimated reading time: 7 minutes

Between big bank earnings, inflation readings, and retail sales figures, there will be lots of data for investors to parse this week.

At a Glance

• The news: Third-quarter earnings season officially gets underway with reports from big banks and financial institutions. We’ll also get retail sales and inflation data from September.
• The context: Last month the Federal Reserve raised its benchmark interest rate for the first time in three years. The goal is to tame inflation that’s been driven up by the war in Iran and investment in AI.
• Your move: Earnings season can trigger sharp swings in stock prices, as trading volumes increase, and the Financials sector  gets in focus. Watch for signs that lending activity is heating up or that banks are increasing their loan loss reserves because of economic fears. 

As is tradition, the major money-center banks will kick off earnings season in earnest this week. For institutions like JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C), investors will be watching credit card delinquencies and loan loss reserves as well as capital markets activity. More broadly, the question will be how net interest margins are trending against rising interest rates and whether households are holding up financially.

Macro traders who care less about individual stocks will be watching for the September Consumer Price Index (CPI) on Wednesday. 

Though the headline inflation rate always gets attention, economists believe core CPI, which excludes food and energy, is a more accurate read of underlying inflation.  If prices aren’t spiralling out of control, the Fed is less likely to rush to raise interest rates. On the other hand, hotter-than-expected data would reignite speculation about more rate hikes, including another 25-basis-point increase later this month. And although there’s only been light chatter, we could even start to hear Fed officials discuss jumbo-sized rate hikes similar to the ones we saw in 2022.

September’s retail sales report and Producer Price Index (PPI) round out the week. The spending data will show how consumer behavior is reacting (or not) to the latest spike in gas prices, while the wholesale inflation data will shed light on how higher oil prices are influencing costs throughout the supply chain. 

On the Docket

Monday

• Fedspeak: Cleveland Fed President Beth Hammack will discuss the economic outlook and monetary policy, followed by moderated Q&A.
  

Tuesday

• 6:00am ET | September NFIB Small Business Optimism: This measures how small business owners feel about current and future economic conditions. 
• 8:15am ET | ADP Weekly Employment Change: This survey offers insight into weekly private sector employment trends. 
• 10:00am ET | September Existing Home Sales: Most home transactions in any given month tend to come from the existing market, and as a result set the tone for the broader housing market. 
• 2:00pm ET | September Treasury Statement: This summarizes the U.S. federal government budget by tracking government revenues and expenditures.
• Fedspeak: Fed Governor Christopher Waller will discuss economic policy in the age of AI at the Bloomberg New Economy Forum. Richmond Fed President Thomas Barkin will participate in a moderated discussion at the Howard University School of Business. Boston Fed President Susan Collins will speak at a community banking event the regional Fed bank is hosting, followed by Q&A.
• Earnings
  • Mega-Caps: JPMorgan Chase (JPM), Johnson & Johnson (JNJ), UnitedHealth Group (UNH), Goldman Sachs Group (GS), Wells Fargo (WFC), Citigroup (C)
  • Large & Mid-Caps: Domino’s Pizza (DPZ)

Wednesday

• 7:00am ET | Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market. 
• 8:30am ET | September Consumer Price Index: The CPI is one of the most popular indicators for tracking consumer price trends and is a marquee release for market watchers. 
• 2:00pm ET |  Fed Beige Book: This report is released eight times per year and tracks the state of the economy based on qualitative information.
• Fedspeak: Fed Vice Chair for Supervision Michelle Bowman will take part in a moderated conversation with the president and CEO of the Institute of International Finance, followed by moderated Q&A. Barkin will take part in a fireside chat at the ChamberRVA Regional Action Summit, followed by moderated Q&A.
• Earnings
  • Mega-Caps: Bank of America (BAC), Morgan Stanley (MS)
  • Large & Mid-Caps: BlackRock (BLK), Progressive (PGR), Fastenal (FAST), State Street (STT)

Thursday

• 8:30am ET | September Retail Sales: This measures spending at retail stores and is a key indicator of consumer demand. 
• 8:30am ET | October Empire State Manufacturing Activity: The New York Fed surveys manufacturing executives in the region on business conditions and their outlook. 
• 8:30am ET | October Philadelphia Fed Manufacturing Activity: The Philadelphia Fed surveys manufacturing executives in the region on business conditions and their outlook.  
• 8:30am ET | Weekly Jobless Claims: This high-frequency labor market data gives insight into initial and continuing filings for unemployment benefits. 
• 8:30am ET | September Producer Price Index: The PPI tracks price trends that producers face and is down significantly from its peak earlier in the cycle.
• Fedspeak: Hammock will discuss leadership and career development at the Women’s Trading Network Fireside Discussion, followed by moderated Q&A. Fed Chairman Kevin Warsh will participate in a fireside chat with the managing director of the International Monetary Fund, Kristalina Georgieva, followed by moderated Q&A.
• Earnings
  • Large & Mid-Caps: Charles Schwab (SCHW), Interactive Brokers Group (IBKR), Prologis (PLD), Bank of New York Mellon (BNY), US Bancorp (USB), PNC Financial Services Group (PNC), Marsh & McLennan Companies (MRSH), JB Hunt Transport Services (JBHT)

Friday

• 8:30am ET | October New York Services Activity: The New York Fed surveys executives in the region’s services industry on business conditions and their outlook. 
• 8:30am ET | September Import/Export Price Indexes: These indexes track the changes in the prices of nonmilitary goods and services traded between the U.S. and the rest of the world. 
• 9:15am ET | September Industrial Production and Capacity Utilization: The industrial sector accounts for much of the cyclical swings in economic activity.
• Earnings
  • Large & Mid-Caps: Travelers Companies (TRV), Truist Financial (TFC), M&T Bank (MTB), Citizens Financial Group (CFG), Regions Financial (RF)

Note: Companies with at least $200 billion in market capitalization are classified as “Mega-Caps,” while others are shown in the “Large & Mid-Caps” sections.

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