Inflation and Earnings: What to Expect in the Coming Week

Let's get to the big story breakdown.

While US stocks may be looking at a reality check as earnings season begins and a crucial inflation report hits tomorrow morning.

We are waiting for reports from JPMorgan, Bank of America, Goldman, and Netflix for clues on corporate guidance in a volatile trade environment.

Now all eyes turn to CPI tomorrow morning for signs on how tariffs may be affecting inflation.

Joining me as we kick off.

The trading week is Michael Reinking, senior market strategist at the New York Stock Exchange.

Well, happy Monday to you, Michael.

Thanks for joining me.

Thanks for having me back.

Well, first and foremost this morning when I woke up, I saw the price of Bitcoin and we were above 120 and also the 122 level and we ended last week talking about that rally in the crypto complex with Bitcoin above 112.

And given that it's cryptoweek, how How can we go here?

Yeah, so you know crypto is the kind of trading market that never sleeps, right?

We, you know, I was paying attention to the trading across that that complex over the weekend, right?

We had the big breakout kind of last week from over 112.

I was kind of mentioning that just a measured move on kind of that consolidation that we had had would kind of target somewhere close to 125.

Um, on a move to the upside, so we've gotten there very, very, very, very quickly, right, you know, obviously today is the start of crypto week.

We're going to see, you know, kind of the House is going to discuss, you know, a lot of different legislation to kind of create a regulatory framework for kind of the crypto complex over the weekend we did see a lot of the alt coins that are really.

Trying to bridge that gap between kind of DI and traditional finance have been some of the big, you know, outperformers so you look at things like kind of ripple, a chain link, you know, things other other coins like that that that are kind of starting to kind of you know, work their way more into the conversation and of course it is a big week for earnings, of course.

We will be paying attention to what's happening in crypto, in particular Bitcoin and what comes out of the nation's capital, but we also get earnings as well as inflation figures tomorrow morning.

So what are you watching out for?

Yeah, so I mean, as you mentioned, it's a big week. we're in the middle of the summer, but it's not going to be, it's not going to be a quiet one by any stretch of the imagination.

So we do.

Of Q2 earnings season kind of officially tomorrow with kind of the major banks and then we also have that inflation data and I think both are kind of both are pretty important.

So starting with the inflation data markets are going to continue to look for signs that we that we're seeing tariffs begin to kind of bleed in.

Uh, or start to kind of impact the inflation data, um, you know, we've seen kind of the services side of things offsetting that a little bit, you know, kind of up until this point, right, you know, if we get kind of a better number tomorrow, that's going.

Kind of continue to make the Fed's job a little bit more difficult in terms of you know kind of dealing with kind of the barrage of of of headlines coming from the administration in Washington, which is also seemed to shift its focus a little bit.

In terms of Fed Chair Powell, the handling of the renovation of the Fed building as opposed to his, as opposed to kind of the decision making on monetary policy in terms of earnings, right, you know, kind of Q2 earnings, I would expect the numbers to continue to be pretty solid right if you think about kind of the economic data that we've seen throughout Q2, it's remained.

Pretty resilient that Q2 earnings season, Q1 earnings season kind of began right at the height of the tire of turmoil.

We didn't see kind of the number of companies that people had thought cutting guidance that never really came to fruition.

And if you looked at the guidance that they provided in Q1, you only saw.

About 15% of the companies that provided guidance were actually provided negative guidance.

I don't expect that you would necessarily see, you know, hear real negative updates from management teams kind of at this point, given the environment's improved a little bit, at least up until last week when we started to see all these trade letters going out.

Yeah, you bring up an important point because we saw record levels for the.

S&P 500 last week and we ended the week lower for the S&P 500 on the session on Friday and we are looking at futures lower as well.

But when we break down these sectors within the equities for S&P 500, we're seeing interesting price actions.

So what do you expect in the coming weeks and especially with earnings, what are you paying attention to?

So I mean it's.

To keep things in perspective, right, the pullback we had last week was very, very modest.

I think the S&P 500 was down 0.3%, right?

So we've had kind of a modest pullback, you know, we're down about 0.25% futures this morning, having cut overnight losses in half, I think.

Right now trade is very much at the forefront.

We had the announcement to increase tariffs on the EU and Mexico over the weekend.

The EU has also postponed their retaliatory tariffs, right?

So that leads to the idea that we can still, you know, they're not escalating, right, that we can still kind of move down a road, down the road of negotiations.

And hopefully kind of those ultimate tariff rates don't end up, you're kind of as high as they are currently though it does seem like President Trump is is more serious at this point and like and is raising some questions around that taco trade in terms of you know kind of the sector performance right last week, we continue to see some out.

Performance in you know kind of the technology space, you know, as as we continue to, you know, we had Nvidia cross over $4 trillion you continue to just hear kind of the the kind of positive momentum on the AI trade over the weekend we heard you know two of the mega caps announced some smaller AI deals, right, so we continue to continue to see spending from that.

Perspective in terms of the financials, right, the capital markets activity has improved.

We've seen the IPO markets starting to improve as well, so you know I would expect to hear some pretty positive commentary from those management teams.

Well, Michael, thank you so much for joining me as we kick off a new trading week.

A lot to keep our eyes on this week, especially in the nation's capital.

Thank you so much, Michael.