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Friday's markets brace for a double dose of Fed speak and big bank earnings

Friday starts off with a rush of big bank earnings, an important retail sales report and comments from the now more hawkish president of the Boston Fed, one of three dissenters at the last FOMC meeting.

In the afternoon, markets will also hear from Fed Chair Janet Yellen, who speaks at a Boston Fed conference at 1:30 p.m. EDT. Boston Fed President Eric Rosengren appears on CNBC at 7:30 a.m. EDT and then makes opening remarks at the Boston Fed's 60th annual economic conference.

Fed watchers expect Rosengren's comments to be the potentially more interesting of the two. Rosengren has gone from being viewed as one of the dovish members of the Fed to a more hawkish one.

"He's at the conversion to saying, 'I now think waiting is a problem,'" said Michael Gapen, chief U.S. economist at Barclays. Gapen noted that Rosengren's view is that the economy is at risk if the Fed doesn't raise rates, since it may have to raise them more rapidly later on and that could cause a slowdown. "He's sounding the alarm that we're slipping behind."

Gapen said he will be looking for some more context on the division within the Fed, which was apparent in the minutes of the last meeting, released this week. The Fed made clear that it still would like to raise rates this year, and markets are still looking to a December rate hike.

Yellen is unlikely to make any major policy statements and is more likely to discuss the Fed's policy tools and the fact that even longer term, interest rates may not be as high as previously expected.

"I'm not sure what she's going to say. The minutes spoke for themselves. They're not going to tighten rates right before the election," said Jack Ablin, CIO of BMO Private Bank.

Wells Fargo, Citigroup and JPMorgan report earnings ahead of the opening bell and are viewed as an important read on the economy and harbingers for the earnings season. Wells Fargo will also be watched closely for any commentary on the cross-selling scandal and the departure of its CEO John Stumpf this week. PNC Financial and Commerce Bancshares also report Friday morning.

"I think they're important. It just focuses the attention on the environment, on credit conditions and these low interest rates. We started the year budgeting for four interest rate hikes this year," said Ablin. If the Fed raises rates in December, it will be the first hike since last December. Banks typically do better in a higher interest rate environment.

The retail sales report, expected at 8:30 a.m. EDT, is anticipated to show a jump of 0.6 percent in September sales. "It's consistent with the strong confidence we're seeing," said Ablin. Last month, retail sales declined a surprising 0.3 percent.

Gapen said consumption this quarter should be up about 2.7 percent, down from a hefty 4.3 percent last quarter. He said even if the number misses his 0.5 percent target, the GDP for the third quarter should still come in at about 2.5 percent.

Other data expected Friday includes PPI at 8:30 a.m., consumer sentiment at 10 a.m. and business inventories, also at 10 a.m.