Big Banks, PepsiCo, Inflation Readings: 3 Things to Watch By

© Reuters.

By Dhirendra Tripathi — Investors piled into bank stocks ahead of this week’s earnings from the biggest of the group, pushing the broad market to another record high.

The surged on Monday, as did the other indexes. Banks are seen as a beneficiary of a reopening economy, though the comparisons to last year’s robust trading activity could be challenging. Low interest rates also cut into bank profit from lending.

On the economic front, the government will release the June readings of inflation trends on Tuesday, and Federal Reserve Chairman Jerome Powell is scheduled to testify before Congress starting on Wednesday.

Over the weekend, Virgin Galactic Holdings Inc (NYSE:) founder Richard Branson completed a successful test flight of his space vehicle, setting the stage for the opening of space tourism in the near future. Virgin Galactic shares fell 14% on Monday after the company announced a share sale.

Amazon (NASDAQ:) founder Jeff Bezos is scheduled to take a flight to the edge of space on his own rocket, through his space company Blue Origin, next week.

As companies kick off earnings this week, here are three things that could affect markets tomorrow:

1. Big bank earnings

JPMorgan Chase & Co (NYSE:)is expected to report earnings on Tuesday, and analysts tracked by expect earnings per shares of $3.16 on revenue of $30 billion. Rival investment bank Goldman Sachs Group Inc (NYSE:), which also reports its second quarter on Tuesday, is expected to announce EPS of $9.96 on revenue of $12.04 billion.

2. More earnings

PepsiCo Inc (NASDAQ:)Is expected to report EPS of $1.53 a share on revenue of $17.97 billion. More than half the analysts who follow the soft drink and snack maker rate the stock a buy, with an average price target of $156, which is 5% higher than its current level.

3. Inflation data

The for June is expected to have risen by an annual rate of 4.9%, a trifle lower than May’s 5%. The Bureau of Labor Statistics report will release the numbers Tuesday at 8:30 AM ET (1230 GMT).

The core inflation rate in the U.S., which excludes food and energy prices, is expected to have climbed 4% in June from a year ago against 3.8% run-up in May, which was then the quickest pace of increase since May 1992.


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