Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow.
1. JPMorgan, Wells Fargo) Kick off Earnings for Banks
The first-quarter earnings season has started already with Delta Air Lines' (NYSE:DAL) report today, but things get a lot of heavier on Friday when three big banks report results before the bell.
Banks have been dealing with lower interest rates, which are squeezing profit margins, and their stocks have trailed the market rebound that set in after the Christmas 2018 slump.
JPMorgan Chase (NYSE:JPM) is the biggest U.S. bank by assets. Analysts polled by Investing.com see the bank earning $2.36 a share in the quarter, down a penny from $2.37 a share in the year-ago quarter.
Revenue is forecast at $28.5 billion, essentially flat from a year ago. The shares are up about 8.8% this year, but that gain comes after the 13.5% decline in the fourth quarter of 2018 and an 8.7% decline for the year.
Wells Fargo (NYSE:WFC) will report $1.12 a share for the period, according to analysts, unchanged from a year ago. Revenue is likely to come in at $20.97 billion, down 4.3% from a year ago.
The stock is up just 3.6% this year after falling 12.3% in the fourth quarter and 14.2% for all of 2018.
Wells Fargo is still struggling to get its management problems under control. Tim Sloan resigned as CEO on March 28, pummeled by regulators, Congress and even his own board. The bank is searching for a new CEO.
And PNC Financial (NYSE:PNC) is expected to earn $2.61 a share in the first quarter, up from $2.43 a share a year ago. Revenue is projected at $4.27 billion, up 3.9% from $4.11 billion in the year-ago period. The shares are up 9.8% this year after falling 14.2% in the fourth quarter and 18.9% for all of 2018.
In all, this earnings season is expected to be a disappointment. FactSet expects earnings for companies in the S&P 500 to decline 4.2%, which would be the first year-over-year decline since the second quarter of 2016.
2. Michigan Sentiment Seen Dipping
The health of the U.S. consumer dominates the economic calendar tomorrow.
The University of Michigan will release its preliminary measure of April consumer confidence at 10:00 AM ET (14:00 GMT).
The Michigan consumer sentiment index is expected to edge down to 98.1, following two-straight months that saw gains above expectations, according to economist forecasts compiled by Investing.com.
The consumer expectations component is also expected to drop slightly, falling to 88.5.
3. Will Rig Count Ramp up Again?
The weekly installment of drilling activity from Baker Hughes comes tomorrow after data last week showed the number of oil rigs operating in the U.S. rose by 15 to 831.
That was the first increase in seven weeks adding to fears that U.S. energy producers are set to ramp up production, which remained at a record 12.2 million barrels a day, the EIA said on Wednesday.
Drilling activity had been on the wane in recent weeks as energy firms ditched big exploration and production spending to focus on earnings growth rather than increased output.
A second-consecutive gain in rig counts will likely add credence to the EIA's expectations that U.S. energy companies will continue to raise output this year.
U.S. crude oil production is expected to rise by 1.43 bpd in 2019 to average 12.39 million bpd, the EIA said on Tuesday, up from its previous forecast for a rise of 1.35 million bpd.
Crude futures on Thursday settled 1.6% lower at $63.58 a barrel.