Week ahead: packed week with bank, Netflix earnings and inflation data on deck

Wall Street has a full plate this week, with earnings season kicking into gear, fresh inflation data on the way, and renewed trade tensions keeping investors on edge.

The spotlight will start to shift away from President Donald Trump’s tariff threats—at least temporarily—as a wave of second-quarter earnings rolls in. Big names like JPMorgan Chase & Co (NYSE:JPM, ETR:CMC), Bank of America Corp (NYSE:BAC), Citigroup Inc (NYSE:C), Goldman Sachs Group Inc (NYSE:GS, ETR:GOS), Johnson & Johnson (NYSE:JNJ), and Netflix Inc (NASDAQ:NFLX, ETR:NFC) are all set to report, offering a clearer picture of how companies are holding up in a tricky economic environment.

Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report noted these stocks have all made new record highs ahead of earnings, “so some caution going in is reasonable,” he said.

Investors will also be keeping a close eye on key inflation reports. The June consumer price index (CPI) drops Tuesday, followed by the producer price index (PPI) on Wednesday. Both are expected to show an uptick, which could influence how the Federal Reserve thinks about interest rates going forward.

“We expect only modest pass-through from tariffs to consumer prices, and service price inflation may continue to cool,” said Kathleen Brooks, research director at XTB.

“Overall, US price data may not move the dial for markets, however, a weaker reading than expected may weigh on the dollar and boost expectations for a Fed rate cut in September.”

Deutsche Bank analysts are expecting headline CPI to rise 0.34% for the month, pushed up by gas and food prices, while core CPI is forecast to climb 0.32%. That would nudge annual inflation to 2.7% and 3%, respectively. Core PCE, the Fed’s go-to inflation measure, is also seen ticking slightly higher.

Tentarelli said inflation surprises could trigger short-term swings. “If CPI comes in as forecast and higher month over month, we expect that equity markets could pull back in the 1–2% range within 1–3 days,” he said. “If CPI is reported higher, we expect the rate cut odds to drop further, which could lead to equity volatility.”

Fedspeak

All eyes will also be on Fed officials for any clues on the policy outlook. A flurry of speeches is lined up after Tuesday’s CPI report, including remarks from Boston’s Susan Collins, Dallas Fed President Lorie Logan, and Richmond’s Tom Barkin. On Wednesday, New York Fed President John Williams will offer his take, followed by Governor Christopher Waller later in the week.

Waller recently said the Fed should consider a rate cut in July, though he acknowledged his view was in the minority. Markets are currently pricing in just under 40% odds of a rate cut by the Fed’s September meeting, according to the CME FedWatch tool.

On top of all this, trade tensions haven’t gone away. Trump over the weekend threatened new tariffs on the European Union and Mexico, raising the prospect of more global friction as the August 1 implementation deadline looms.

“Tariffs are back on again,” said Brooks. “The EU received a letter from President Trump that he would impose a 30% tariff rate on the Euro area, dashing hopes from last week that the EU would agree to a 10% rate.”

Economic calendar

Investors will also be watching retail sales data on Thursday to get a better sense of consumer spending in June. Deutsche Bank is looking for a 0.2% rebound in headline retail sales, with retail control—a component closely tied to GDP—up 0.3%. If that forecast holds, it would support an estimate for second-quarter consumer spending growth of around 2.5%.

Initial jobless claims on Thursday will also draw attention as they correspond to the survey week for July’s payroll data. Economists say the figures so far don’t point to a weakening job market.

Housing starts and building permits (Friday), as well as the University of Michigan’s preliminary July consumer sentiment reading, will round out the data-heavy week.

Despite the noise, some strategists remain upbeat.

“We remain bullish on the S&P 500 and Nasdaq 100,” said Tentarelli. “Both made new record intraday highs last week and are trading over rising 10-week and 40-week moving averages.”

Still, it’s shaping up to be a pivotal few days for markets. Between earnings, inflation, and geopolitics, investors will be juggling plenty as they look for signs of what comes next.

“Overall, analysts have been downbeat about this earnings season,” Brooks noted. “The question is whether this has lowered the bar enough for earnings to exceed weak expectations and give risk sentiment a boost.”