By Kim Khan
Investing.com - Wall Street shrugged off the more granular numbers to focus on the future again today.
The major indexes all rose sharply, despite sharp drops in profit from major banks to kick off earnings season.
But the “current relief rally might end up faded if there is a (second) wave of infections, and if recession lingers,” J.P. Morgan said in a note. “Bond yields are likely to stay subdued for longer on further QE and very weak activity prints.”
More bank quarterly earnings come tomorrow, while more dour economic data is also expected. And oil inventories will be reported after a punishing day for crude.
Here are three things that could move the markets tomorrow.
1. More Results From Big Banks Arrive
Financial earnings continue ahead of trading Wednesday. The sector struggled today after JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) reported losses after setting aside large amounts to cover the high number of expected loan defaults due to the economic lockdown.
Goldman Sachs (NYSE:GS) will be reporting, with analysts predicting a profit of $3.75 per share on revenue of about $8.5 billion, according to forecasts compiled by Investing.com.
One highlight for Goldman could be trading revenue, with volatility in markets increasing sharply in reaction to the pandemic.
Citigroup (NYSE:C) will weigh in, with analysts looking for earnings of $1.59 per share and revenue of about $19 billion.
“Along with the bottom-line numbers, investors will also be eyeing Citigroup’s efficiency ratio, or expenses as a percentage of revenue,” Investing.com’s Haris Anwar said. “This metric has come in at less than 60% for the past four years, making Citi the only major global bank able to maintain such a winning streak.”
Bank of America (NYSE:BAC) is also on the calendar.
BofA is seen earning 59 cents per share, with revenue coming in at about $22.7 billion.
After the bell, retailer Bed Bath & Beyond (NASDAQ:BBBY) will issue numbers. The struggling retailer has seen shares fall nearly 70% year to date.
2. Big Drop in March Retail Sales Seen
The economic calendar is also busy tomorrow, with last month’s retail sales numbers taking the spotlight.
The Commerce Department reports the latest figures at 8:30 AM ET (12:30 GMT).
March retail sales are expected to have dropped 8%, while core retail sales, which exclude auto sales, are seen posting a drop of 4.8%, according to economists’ forecasts compiled by Investing.com.
The headline drop would be the largest drop recorded by far.
“No, hoarding of toilet paper and hand sanitizer does not begin offset the blow of lost paychecks and shutting much of retail down,” Grant Thornton Chief Economist Diane Swonk tweeted.
At the same time the New York Federal Reserve will report the April Empire State Manufacturing index.
Economists are looking for a reading of -35, close to its lowest level of -38.2 during the Financial Crisis.
At 9:15 AM ET, the Federal Reserve will report on March industrial production, expected to have fallen 4%, and capacity utilization, expected to have ticked down to 73.8%.
3. Inventories on Tap After Oil Prices Tank
Oil prices were slammed as the market saw more evidence of how hard it is to coordinate oil production cuts, this time with Texas adding some confusion into how much the U.S. may be adding to global cuts.
Tomorrow, the official weekly government oil inventory numbers are released.
The Energy Information Administration is expected to report that U.S. crude stockpiles rose by 11.7 million barrels last week, after having risen 30.6 million barrels over the past three weeks.
Gasoline stockpiles are expected to have gained by 6.4 million barrels last week, after a net build of 16.5 million barrels over three weeks.
The American Petroleum Institute said today its measure of crude inventories for the week ended April 10 jumped by 13.1 million barrels.