U.S Financial Sector Earnings in Focus

After weeks of Fed speak and rising yields driving stock action, corporate earnings will take center stage in the week ahead.

Results from Bank of America (BAC) and Goldman Sachs (GS) will provide a look at how the financial sector is responding to the rising rate environment. Meanwhile, Tesla and Netflix will highlight the start of tech earnings.

Quiet Economic Data Week A September retail sales report is expected to show minor growth amid an otherwise quiet week for economic data.

Recent economic data showed inflation cooling enough for the market to bet that the Fed won’t raise interest rates at its November meeting but stocks still struggled to find solid footing as rising geopolitical risks and the fallout from higher for longer interest rates continue to cloud the picture.

Mixed Week for Major Indices In the past week, the Nasdaq (^IXIC) fell nearly 0.2% while the benchmark S&P 500 (^GSPC) rose almost 0.5% and the Dow Jones Industrial Average (^DJI) popped about 0.8%.

Fed’s Interest Rate Hikes and Corporate Impact The impact of the Federal Reserve’s interest rate hikes on corporate America are expected to once again be a key focus during third quarters earnings season. Major financial institutions are holding up, with JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) reporting higher profits.

JPMorgan CEO Jamie Dimon, however, warned of risks ahead, including rising geopolitical tensions in the Middle East, which could cloud the economic picture.

Upcoming Earnings Highlights In the week ahead, Bank of America, Goldman Sachs, and Morgan Stanley (MS) will lead the earnings calendar for the financials sector.

Tesla faces concerns about margins and slowing growth, with questions about whether it can grow earnings in fiscal year ’24.

Netflix investors are looking for details on pricing changes, sub growth, and the success of its advertising tier.

Earnings Season’s Impact on Stocks The question facing investors this earnings season will be if company results can bring stocks out of the recent slump. The Street projected flat earnings compared to the same period a year prior. Some strategists believe the stronger-than-expected data could drive better-than-feared earnings, but interest rates remain a potential hindrance.

Weekly Calendar Highlights

• Monday: Empire Fed manufacturing data.
• Tuesday: Home Builders sentiment index, industrial production, and retail sales data.
• Wednesday: Housing data, mortgage applications.
• Thursday: Jobless claims, Philly Fed Business outlook, home sales, and leading economic indicators.
• Friday: No notable economic releases.

Josh Schafer is a reporter for Yahoo Finance.