KEY POINTS
  • Earnings season begins just as the much-anticipated Chinese trade deal is expected to be signed in the coming week.
  • Both events are likely to be a positive for stocks, but they could be negative if earnings don't meet expectations and there are too few details in the trade agreement.
  • Big banks are first up to report earnings, with J.P. Morgan, Citigroup and Wells Fargo on Tuesday.
  • There is also some key data, including CPI and retails sales, and about a half dozen Fed speakers.
Chinese Vice Premier Liu He (C) with United States Trade Representative Robert Lighthizer (R) and Treasury Secretary Steven Mnuchin (L) pose for photos before holding talks at the Xijiao Conference Center in Shanghai on July 31, 2019
Ng Han Guan | AFP | Getty Images

The stock market's race to new highs could be put to the test in the coming week by two events — the signing of a phase one trade deal with China and the start of corporate earnings season.

Stocks have been gaining steadily since it became clear late last year that the U.S. and China reached a truce and would agree to a phase one deal, rolling back some tariffs and avoiding new ones. But details of that deal have never been made clear, so markets will be focused on any information that will clarify how it will be implemented and what checks and balances there are to ensure compliance.