Investing.com – The coming week marks the start of the first quarter earnings season on Wall Street.
While analysts expect fairly strong results, most will watch what companies say about the outlook for the current quarter and the rest of the year as they expect faster economic growth.
On the economic calendar, the latest reports on US consumer price inflation and retail sales will be the week’s biggest data point.
Global financial markets will also pay particular attention to comments from a few US Federal Reserve officials, including Fed Chairman Jerome Powell, for additional insight into the outlook for monetary policy over the coming months.
In other Asian countries, China will be the first major economy to release Q1 growth data when eagerly anticipated GDP figures are released.
Before the coming week, Investing.com compiled a list of these and other key events that are likely to affect the markets.
1. The US 1Q earnings season begins
Wall Street’s first quarter earnings season kicks off next week with banking giants JPMorgan Chase (NYSE :), Goldman Sachs (NYSE :), and Wells Fargo (NYSE 🙂 everyone will be releasing their latest quarterly results on Wednesday.
Income from Bank of America (NYSE :), Citigroup (NYSE 🙂 and Blackrock (NYSE 🙂 are due on Thursday, followed by Morgan Stanley (NYSE 🙂 on Friday.
Other big names released based on this week’s results include UnitedHealth (NYSE :), Delta Air Lines (NYSE :), PepsiCo (NASDAQ :), and Rite Aid (NYSE :).
Overall, according to Refinitiv, earnings in the first quarter should have increased by almost 25% compared to the previous year. That would be the biggest quarterly gain since Q3 2018, when tax cuts under former President Donald Trump spurred earnings growth.
Financial data is expected to have one of the biggest earnings gains, up 75.6% year over year, while Materials are up 45.4%.
2. US consumer price inflation (CPI)
The Commerce Department will release consumer price inflation data for March on Tuesday at 8:30 a.m. (CET), which should give clearer indications of the rate of inflation.
The CPI is estimated to have increased last month and year on year. If confirmed, it would be the fastest increase in eight months.
Excluding food and fuel costs, core inflation is expected to rise month-on-month and year-over-year, slightly faster than the 1.3% increase seen in February.
Rising inflation expectations resulted in a Q1 sovereign bond sell-off that pushed yields to pre-pandemic highs in recent sessions.
3. US retail sales
The trading department will be releasing March retail sales data on Thursday at 8:30 a.m. EST.
The consensus forecast assumes the report will show a surge in retail sales after the sharp 3% drop in February, which was the biggest drop since April 2020.
Without the automotive sector, sales are expected to increase by 2.7% in the previous month.
In addition, this week’s economic calendar includes reports on jobless claims, building permits, construction starts, and two surveys on manufacturing conditions in the Philadelphia and New York regions.
The preliminary reading of the University of Michigan Consumer Sentiment Index is also on the agenda.
4. Fed spokesman
A series of Fed speeches will draw market attention over the coming week as traders look for further clues about interest rates.
At the top of the agenda are comments from who will discuss the economy in an interview held on Sunday night on the CBS 60 Minutes program. He will also speak at an Economic Club of Washington event on Wednesday.
The Fed chairman recently reiterated that the occurrence of inflation should be temporary and that the central bank will maintain its adjustment policy for a long time.
The focus will also be on speeches by Fed Vice Chairman Richard Clarida, New York Fed President John Williams (NYSE :), and San Francisco Fed President Mary Daly.
5.China 1Q Gross Domestic Product (GDP)
China will publish its gross domestic product (GDP) for the first quarter on Friday morning.
The data is expected to show that the world’s second largest economy grew in the first three months of 2021 compared to the same period last year, accelerating from the previous quarter’s pace of 6.5%.
In addition to the GDP report, the Asian nation will also publish data on March trade balance, industrial production, retail sales, unemployment and investment in property, plant and equipment.
China’s economy has shown signs of improvement over the past few months. Activity rebounded to pre-pandemic levels thanks to a resurgence in global manufacturing and a strong rebound in domestic spending.
– Reuters contributed to this report