Here's What to Expect as Another Pivotal Earnings Season Begins

With the new earnings season fast approaching, this is a quick follow-up to help us navigate the week's events. Delta Airlines, PepsiCo, and Conagra Foods will get us started as the first companies to report before the bell this Thursday.

Yesterday, we spoke about how inflation might give a boost to nominal results. But, keep in mind that new data might stir things up, particularly after the June jobs report.

So, here’s what I’m watching this week…

Michael Barr, the Fed Vice Chair for Supervision, is scheduled to discuss bank oversight and capital rules on Monday. Any hint of a warning from him could create ripples across the banking sector. Let's not forget Treasury Secretary Janet Yellen's concerns about the stability of the banking system.

On Tuesday, all eyes will be on FAANG stocks as Amazon's Prime Day arrives. This day is known for enticing deals that make us buy items we didn't even know we needed. However, do remember that Prime Day's aim is to clear inventory. By making a purchase, you essentially give Amazon an interest-free loan for six weeks on the vendor's dime. Instead, consider buying directly from vendors.

Wednesday will reveal the Consumer Price Index (CPI) for June. Although average predictions hint at a drop to 3.0% from 4.0%, we should be more concerned about core inflation, which is forecasted to linger around 5%, down from 5.3% in May. A lot of inflation took place in the first half of 2022, so we might see CPI start to climb again if monthly increases continue. This might be why the Fed recently hiked the terminal rate to 5.6%.

Brace yourselves for Thursday! We will get to see earnings reports from Delta Air Lines (DAL), PepsiCo (PEP), and Conagra Brands(CAG). Not only that, but OPEC will also release its monthly Oil Market Report. Watch out for any news regarding Saudi Arabia's plan to significantly cut production in July and August. Also, stay tuned for FTC Chairman Lina Khan's testimony to the House Judiciary Committee. This could be our chance to gain some insights on the antitrust and anti competitive issues affecting the U.S. economy.

To wrap up the week, on Friday, we'll see quarterly reports from big players like JPMorgan Chase (JPM), Wells Fargo (WFC), Blackrock (BLK), and Citigroup(C). This could cause significant shifts in the Direxion Daily Financial Bull 3X Shares (FAS) and the Direxion Daily Financial Bear 3X Shares (FAZ).

Also, at 10 AM on Friday, the University of Michigan will release its Consumer Sentiment Index. With consumers grappling with a 7.2% mortgage rate, increased food inflation, and a surge in credit card debt, the index could sway the market. Plus, as various banks have predicted, consumer savings might deplete by Q4 2023 or early Q1 2024. But hey, wages are increasing and so are rates, so it'll be interesting to see how all this reflects on the U.S. consumer's mind.

Stay tuned to your inbox, and let's get ready for another important earnings season.