The coming week marks the start of the first quarter earnings season on Wall Street. While analysts expect results to be fairly strong, most will be watching to see what companies say about the outlook for the current quarter and the rest of the year, given expectations for faster economic growth.
Meanwhile, on the economic calendar, the latest reports on U.S. consumer price inflation and retail sales will be the biggest data points of the week.
Global financial markets will also pay close attention to comments from a handful of Federal Reserve officials, including Fed Chair Jerome Powell, for additional insight into the outlook for monetary policy in the months ahead.
Elsewhere, in Asia, China will become the first major economy to report first-quarter growth data when it publishes highly anticipated GDP numbers.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
1. U.S. 1Q Earnings Season Kicks Off
The first quarter earnings season on Wall Street will kick off in the coming week, with banking giants JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), and Wells Fargo (NYSE:WFC) all set to release their latest quarterly results on Wednesday.
Overall, Q1 earnings are expected to have jumped nearly 25% year-over-year, according to Refinitiv. That would be the biggest quarterly gain since 3Q 2018, when tax cuts under former President Donald Trump drove a surge in profit growth.
Financials are expected to show one of the biggest earnings gains, up 75.6% year-on-year, while materials are seen up 45.4%.
2. U.S. Consumer Price Inflation (CPI)
The Commerce Department will publish March consumer price inflation figures at 8:30AM ET Tuesday, which should give clearer signs on the pace of inflation.
CPI is expected to have risen 0.5% last month and 2.5% over the prior year, according to estimates. If confirmed, it would mark the fastest increase in eight months.
Excluding the cost of food and fuel, core inflation is projected to climb 0.2% from a month earlier and 1.6% on a year-over-year basis, a tad faster than the 1.3% increase registered in February.
Rising inflation expectations helped spark a first-quarter selloff in Treasuries that drove yields to pre-pandemic highs in recent sessions.
3. U.S. Retail Sales
The Commerce Department will release data on retail sales for March at 8:30AM ET on Thursday.
The consensus forecast is that the report will show retail sales jumped 5.5%, rebounding from February’s steep decline of 3%, which was the biggest drop since April 2020.
Excluding the automobile sector, sales are expected to rise 4.8%, snapping back from a drop of 2.7% in the preceding month.
In addition, this week’s economic calendar also features reports on jobless claims, building permits, housing starts, as well as a pair of surveys on manufacturing conditions in the Philadelphia and New York regions. The preliminary reading of the University of Michigan’s consumer sentiment index is also on the agenda.
4. Fed Speakers
A number of Fed speeches will get market attention in the week ahead, as traders watch for further clues on interest rates.
Topping the agenda will be remarks from Fed Chair Jerome Powell, who is due to discuss the economy in an interview conducted by CBS’ “60 Minutes” program on Sunday night. He also speaks Wednesday at an Economic Club of Washington event.
The Fed chair has reiterated lately that any emergence of inflation should be temporary and that the central bank will keep its accommodative policies in place for a long time.
Speeches from Fed Vice Chair Richard Clarida, New York Fed President John Williams (NYSE:WMB), and San Francisco Fed President Mary Daly will also be in focus.
5. China 1Q Gross Domestic Product (GDP)
China will post its first quarter gross domestic product (GDP) on Friday morning.
The data is expected to show the world’s second-largest economy grew 18.8% in the first three months of 2021 when compared to the year-ago period, accelerating from the previous quarter’s 6.5% pace.
Besides the GDP report, the Asian nation will also publish data on March trade balance, industrial production, retail sales, unemployment, and fixed asset investment.
China’s economy has shown signs of improvement in recent months, with activity rebounding to pre-pandemic levels thanks to a resurgence in global manufacturing and a sharp recovery in domestic spending.
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