June CPI, Big Bank earnings in focus this week: Top stories

Wall Street is gearing up for a crucial week as key economic data and major bank earnings converge. Investors are focusing on two main events: the Consumer Price Index (CPI) report due out Thursday and earnings releases from banking giants like JPMorgan Chase & Co. (JPM) and Wells Fargo (WFC) on Friday. Together, these reports will help investors gauge the potential direction of the Federal Reserve's monetary policy.

Morning Brief co-hosts Seana Smith and Brad Smith break down the top market stories to come this week.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This article was written by Angel Smith

Video Transcript

Wall Street is gearing up for a busy week, stock futures relatively flat after stocks closed near record highs last week, the first week of July and of the second half and the third quarter.

And inflation is now top of mind with job growth starting to slow investors looking to fed Chair Powell and the release of June CP I that consumer price index that's due out Thursday to see whether the Federal Reserve could potentially cut interest rates in September here.

Of course, that is the probability, the earliest probability that we're seeing that's leaning towards the side of a potential cut and then you look out to later on this year and what it could look like for December that still stays in the mind of investors as of right now though, we certainly have.

So now we have the economic calendar up if we could flip over to the earnings calendar because that is really what is also front and center for investors this week as they had in uh digest the latest numbers on inflation exactly what that means for the fed.

Of course, the eyes are also going to be on earnings results.

The health of corporate America, just what we are seeing there.

And it really kicks off on Thursday with Delta Pepsi Co and then Friday, when we start to hear from some of those larger banks and Brad, I have a chart up if we can throw it up here just about the earnings growth and some of those expectations going into this quarter and then beyond it and you can see that spike of 8.8% here in the second quarter.

But then look out into the fourth quarter of the year and into 2025 you have this uh viewpoint that has really been driving the markets now that we have this higher bar that these corporations are going to have to clear.

And if, if last quarter was any uh I guess, signal of what we could see in terms of those reactions, the companies that did beat the streets expectations there only outperformed the S and P the following trading day by an average of three basis points, which is well below the historical average there.

So you talk about a high bar there for corporations and exactly what they need to meet and exceed this earnings season.

You got a question, how big of a driver or how big of a lift to the upside.

Maybe we will see the broader market on the heels of these earnings results.

Yeah, the top three companies by market cap reporting this representing over $1 trillion of companies that are set to report JP Morgan, Pepsico and Wells Fargo.

Those top three, of course, you got a host of names even as we were taking a look at the calendar and some of those logos, household names like Delta, like Citigroup, Bank of New York, Mellon Bny, of course.

And then additionally, you've got conagra brands, but two interesting stats from the folks over at factset that really came to mind and jumped out to me in this most recent report for the earnings growth front for Q 2 2024 the estimated growth rate for the S and P 508.8%.

Now, if that's the growth rate for the quarter, guess what?

It's gonna mark the highest year over year earnings growth rate reported by the index since Q one of 2022.

And you asked the question of how expensive things are right now.

Well, on a story of valuation, the forward 12 month pe ratio for the S and P 521.2.

Why is that significant?

It's above the five year average and above the 10 year average.

And so ultimately, that's something that we're gonna be tracking as we go throughout this earning season as well.