The 2026 earnings season officially kicks off next week with JPMorgan City and Wells Fargo reporting.
Now it is a tale of two markets on Wall Street.
The IPO window is blasting open with SpaceX confidentially filing to go public and on Main Street, hard data like Delta's premium bookings as well as box office sales show a highly resilient, experience focused consumer.
But if you want to know how the American consumer is really doing, also take a look at movie.
The 2026 box office is off to its strongest start since the pandemic.
Well joining me to weigh in this morning here at the New York Stock Exchange is Christine Short, Head of Research at Wall Street Horizon.
Good morning.
Thank you so much for joining me to be here.
Thank you.
Well, a lot of headlines as usual, moving the broader market, but I do want to start out with a look at the calendar for earnings next week.
What metrics are you watching for from the big banks. a big reality check, right?
We're going to check in with the big companies, with their CEOs and management teams and get an idea of how they're feeling in this environment, right?
So not only are we getting backwards looking data from Q1, but it's guidance that we want to see going forward.
So like you said, we kick it off with the big banks JPMorgan, Citigroup, and Wells Fargo on Tuesday.
We get a good read on the economy from Jamie Dimon at JPMorgan, Jane Frazier, CEO at Citigroup.
They don't mince words, right?
Overall, financials are expected to do very well, right?
The group, the sector is anticipating EPS growth of 15% year over year, top line growth of about 10%.
The banks are likely going to have benefited from all this volatility we saw in Q1.
I think FI trading desks, so fixed income, commodities and currencies are going to be the real volatility winner.
But equity trading as well will likely have done well and be resilient with this rotation.
Out of tech and consumer into energy, materials and defense.
And so those two areas we're looking at as well as investment banking.
You talked about all these IPO rumors that are swirling.
Q1 was very strong for IPOs, so that will likely have benefited JPMorgan, Goldman Sachs, Morgan Stanley, and M&A activity has also been strong overall though.
S&P 500 companies are expected to have grown 13.2% in Q1 on a year to year basis.
That is the sixth.
Consecutive quarter of double digit growth and then revenues expected to grow somewhere around 10%.
So it's expected to be a strong season but again we'll be looking at the guidance you saw this morning Constellation Brands did withhold guidance and so that could be something we haven't really seen a lot of companies doing that since Liberation Day when all the tariff news kind of spooked some of the companies from confirming or giving new guidance.
So we'll be interested to see if the war in Iran will have the same effect on corporate guidance this quarter.
A lot of moving parts as you highlighted there, Christine heading into key one of this year.
There are a lot of expectations, especially when it comes to the IPO market.
So what is the reality and what do you expect in terms of some of these AI as well as mega tech names a lot of rumors swirling.
What I can tell you is in Q1 we had the strongest quarter for IPO filings that sorry the 3rd strongest quarter in about 3.5, 4 years.
The back half of 2025 of course takes the cake with Q3 and Q4.
We saw the most IPO filings that we've seen since 2021, but we see that momentum continuing into this year with strong showing for Q1 so far.
You've got SpaceX filing confidentially for an IPO.
You've got OpenAI.
The rumors are swirling about perhaps a Q4 IPO.
You have CFO Sarah Fryer yesterday saying they were going to reserve a chunk of those shares for the retail community, so those.
Stations are happening, but like you said, there's kind of this AI battle who will be first, OpenAI or Anthropic, because there's also chatter that Anthropic is eyeing a public debut this year as well, as well as data bricks and many others.
So like you said, this could be the year of the mega IPO.
If SpaceX.
SpaceX comes in at their $1.75 trillion valuation, it would upend the Saudi Aramco deal from 2019 as the largest IPO in history.
So a lot of exciting things on the IPO front.
And I do want to shift our focus on over to Main Street because of course there's a lot of anticipation about some of these mega IPOs as we head into the rest of 2026.
But I'm curious about the consumer and the case shaped economy here.
I understand that more people are actually heading to movie theaters.
Is that correct?
Yeah, we saw that as an encouraging data point for the middle income to lower income cohort.
We've talked a lot about how the higher income consumer has really carried the weight for the overall.
US consumers, so there's a lot of talk about all the consumer has been resilient, but that's really been on the back of the higher income consumer.
We saw that in Delta's numbers yesterday.
They're still able to outsell premium cabin and that those revenues have outpaced main cabin revenues, right?
That's why it puts them ahead of the low cost carriers because the low cost carrier does obviously cater to a different type of consumer.
And so we've seen that time and time again.
Affluent consumers are less price sensitive.
They're less sensitive to inflation.
But the lower or middle income consumer, if they're looking for an experience, why not head to the movies?
Certainly ticket costs have gone up.
We've seen inflation impact those.
But if you're looking for an experience that is a lower cost way to do so, and like you said, box office sales are year to date strongest since they've been since before the pandemic.
We saw Super Mario Galaxy released this week and $195 million on its opening weekend, a holiday, of course, and so that's really boosting those sales.
See those as encouraging signs and even data on Friday on the job situation.
I don't make a trend of just one month of data, but it did come in better than expected.
Unemployment fell to 4.3%.
Wage growth was still a little light.
However, you know, moving in the right direction, so good to see that come in a little better than expected.
And finally, Christine, for our viewers out there who are watching right now and they're noticing not only are they paying more for a gallon of gas.
But the cost of everything, as you mentioned, movie theater tickets climbing and even when you buy a carton of popcorn or a soda at the movie theater, we know that it's not cheap.
So where are we headed in terms of the economy, labor market, as well as inflation in 2026?
I think unfortunately a lot of us have just gotten used to paying the higher prices, right?
We've been doing it for a couple of years now, and so inflation is we're sort of.
Again used to paying those higher prices, I think certainly with gas being you know prices at the pump going up, that doesn't help with the ceasefire rally we saw yesterday, which you know is down today.
There was hopes that in the next 36 to 48 hours we would start to see prices at the pump fall.
You know, oil, both Brent and WTI crude were way down yesterday, but now they're hovering around the $100 a barrel mark again.
So there was some excitement about it could we start to see some relief.
As you know, gas prices have gone up about 40% since the beginning of this conflict.
How do consumers factor that in?
Well, we know if they're paying more for gas, that means they're moving money from somewhere else, right?
They're maybe not spending on other discretionary items.
What I will quickly comment on is this tax refund windfall that we've gotten so far.
Tax refunds are up about 10% to 11% from where they were last year, with the IRS paying out more because of changes to tax bills.
Usually consumers treat that as windfall, and they will spend more, and we saw consumer spending fall a little bit this morning in the PCI or PCE report, but motor vehicle sales were way up.
So we'll see as the rest of the tax refunds come out, but that could offer a little bit of relief for consumers that are paying more at the pump.
Well, Christine, that is a reminder that next week is tax day on April 15.
So thank you so much for joining us today as always, and thank you so much for sharing yours for having me pleasure.
