The Heat Is On: All Eyes on Big Bank Earnings
Retail sales for March are expected at 8:30 a.m. ET and are expected to show a drop of 0.1 percent, while PPI, producer prices data is expected to show a decline of 0.4 percent, also at 8:30. "I think we're going to get a little cool down in retail and we'll get cool down in PPI too with gasoline prices falling," said Jonathan Basile, economist with Credit Suisse. "Gasoline giveth in February and takes away in March."
"While they hurt February, they'll help March and we'll wind up with potentially better momentum for consumer spending," he said. Gasoline prices at the pump were $3.56 nationally for unleaded Thursday, down from $3.57 Wednesday, and $3.70 a month ago, according to AAA.
Consumer sentiment is also reported Friday at 9:55 a.m., and is expected to rise slightly to 79, from 78.6 in March. Business inventories are released at 10 a.m. Fed Chairman Ben Bernanke speaks at 12:30 p.m. in Washington on the topic of creating resilient communities. Boston Fed President Eric Rosengren will be interviewed by CNBC's Steve Liesman at 10:45 a.m.
Stocks are sharply higher so far on the week, with the Dow up 2.1 percent at 14,865 and the S&P 500 up 2.6 percent at 1593. Both indices are at record levels and are just a shot from the big round mile markers of Dow 15,000 and S&P 1600. The market saw liftoff in relatively quiet trading Thursday, with the Dow up 62 and the S&P up five. But the Nasdaq was up just slightly, held back by big declines in Microsoft and other techs, after fresh data from IDC showed the worst ever, 14 percent quarterly decline in PC shipments in the first quarter.
(Read More: Street Turns Bearish on Microsoft as PCs Decline)
"It's kind of a rerun of yesterday," said Art Cashin, director of floor operations at UBS. He said the big banks should be the important drivers for stocks Friday morning.
J.P. Morgan is expected to earn $1.40 per share on revenues of $25.7 billion, and Wells Fargo is expected to report earnings of $0.89 per share on revenue of $21.6 billion.
Cashin said the market keeps rising with no sense of frenzy, which would be evident in a short-covering rally or if anxious investors were rushing in for fear of missing the market's gains.
"This kind of buying hints at buying that's not motivated by performance," said Cashin. "I think it's that 'I want to put my money where it's safe.'" Cashin said that means it's likely there are foreign buyers helping to drive U.S. stocks higher, and money may be leaving Europe because of Cyprus and Japan, because of the weakening currency.
Vassili Serebriakov, BNP currency strategist, said the markets are on alert, watching for fund flows from Japan. The weakening yen nearly touched a level of 100 to the dollar Thursday, as it continues to weaken on a new massive easing program by the Bank of Japan. Dollar/yen was at 99.68 late in the New York day.
(Read More: BOJ Bazooka to Boost a Corner of Bond Market: Pro)
"We're looking to see the footprints of Japanese investors in various markets," he said.
Eurogroup ministers meet Friday in Dublin and are expected to discuss Portugal and Ireland and whether to give the two countries more time to pay their loans.