Good morning. Good Monday. Good markets. Welcome back to the week ahead on Wall Street and a look at what investors need to know for the next five days.
Geopolitical events, a stumbling economy and richly valued stocks are all staring the market in the face, yet the battle has been at worst a standoff so far. Now comes another week and a fresh set of challenges for investors to absorb.
Friday will be a huge day again this week. That's when the latest report on retail sales will come through, providing a gauge of where things really stand. If expectations are right, the news won't be good: a likely 0.4 percent drop month-to-month overall, or a meager 0.1 percent gain if you include auto sales.
Speaking of auto sales, the big New York International Auto Show also starts Friday and runs until April 23. New models for Dodge, Toyota and Jeep are expected to be the big draws, but market watchers should monitor events there to get a feel for what future sales will be like.
If it's early April, then it's that time when we get to hear how much money companies made so far this year.
For banks, the profits are expected to be considerable.
In fact, the broad category of that Wall Street calls "financials" — banks, insurers, brokerages and the like — likely saw earnings growth of nearly 15 percent in the first quarter, according to FactSet. The sector is predicted to lead the way for an total profit gain of 9.1 percent.
So why should you care? Because companies like banks and materials are supposed to be the big beneficiaries of the "Trump trade." President Donald Trump's plans to juice the economy by cutting taxes, loosening regulations and spending big on public works projects feed into the sweet spot for banks.
If profits are up, that's a good sign that the economic growth narrative is holding true. If they're lackluster, it could mean a more challenging year.
Some events to keep an eye on this week:
On Monday, U.S. Federal Reserve Chair Janet Yellen delivers a speech at the University of Michigan's Gerald R. Ford School of Public Policy. Why it matters: The Yellen Fed shook up the market last week with talk about starting to unload the $4.5 trillion in bonds it has accumulated over the past eight years. Any further clues from Yellen could move markets.
Tuesday brings a couple important economic indicators. There's a small business index reading before the market opens, then the monthly Job Openings and Labor Turnover Survey, or JOLTS, later in the morning. Why it matters: Yellen watches the JOLTS report closely for clues on the employment picture.
Elsewhere in the economy, there are counts on import and export prices Wednesday, produce prices on Thursday, and consumer prices as well as the University of Michigan consumer sentiment survey on Friday. Why they matter: A disturbing piece of news Friday, namely that the Atlanta Fed had knocked its first-quarter GDP growth projection all the way down to 0.6 percent. That's another way of saying the economy did almost nothing to start the year. Incoming economic data, then, will help tell whether growth is ever going to start picking up.