Earnings season shifts into full gear next week, with some of the world’s largest companies set to report earnings, including Johnson & Johnson, Bank of America, Netflix, Lockheed Martin, Tesla, Morgan Stanley, IBM, American Express, and Procter & Gamble, among many others. The latest updates on the housing market will become available, including March housing starts, building permits, and existing home sales, and the NAHB’s Housing Market Index for April. We’ll also get inflation readings from the U.K., eurozone, and Japan, as well as first-quarter GDP figures from China.

The U.S. Supreme Court will hear arguments on Monday in Slack vs. Pirani, a complex securities law case that could impact how easy it will be for investors to sue companies over alleged misstatements or omissions in their registration statements during direct listings. The case may potentially have major implications for direct listings—either making them a more attractive option or removing them as a viable option.

Earnings Season Shifts Into High Gear

We’ll receive reports from some of the largest companies in the world next week, including Johnson & Johnson, Bank of America, Netflix, Lockheed Martin, Tesla, Morgan Stanley, IBM, American Express, and Procter & Gamble, among many others.

Earnings season began on a positive note this week, with earnings at big banks including JPMorgan Chase, Citigroup, and Wells Fargo topping analysts’ estimates despite recent turmoil in the banking sector. Net income at JPMorgan Chase, America’s largest bank by assets, surged 52% to $12.6 billion,1 well above consensus estimates, while profits at Citigroup rose 7%.2 Earnings at big banks were cushioned by greater deposit inflows in March, amid a "flight to safety" to larger and well-capitalized banks following the collapse of Silicon Valley Bank and Signature Bank.

Housing Market Updates

We’ll also get the latest updates on the housing market, including March housing starts, building permits, and existing home sales, and the NAHB’s Housing Market Index for April. Housing starts, a proxy for home construction and supply, are projected to have fallen to 1.42 million in March, from 1.45 million in February and compared to a peak of 1.8 million in April of last year. Existing home sales likely fell to 4.5 million last month, after unexpectedly surging to 4.58 million in February, which broke a 12-month streak of declines beginning in February of last year.

The U.S. housing market could be experiencing a rebound after a sharp slowdown in 2022, amid slowing annual price gains and a pullback in mortgage rates. According to Redfin, the percentage of homes selling above their listing price—a proxy for housing demand—rose to 28.5% in March from a three-year low of 21.2% in January, while median selling prices rebounded back above $400,000 from a one-year low of $383,000 in January.3 Mortgage rates have retreated from their fall highs, with the average rate on a 30-year fixed-rate mortgage guaranteed by Freddie Mac falling to 6.27% this week, down from a 20-year high of 7.08% in early November.

GDP Release From China

The world’s second-largest economy will issue first-quarter gross domestic product (GDP) figures on Monday. China’s economy likely expanded 2.2% in the first quarter, or 4% year-over-year, after recording no growth in the previous quarter. For all of 2023, the economy is projected to grow 5.4%,4 after expanding just 3% last year in what was the slowest expansion in decades excluding the onset of the pandemic in 2020, as strict COVID-19 lockdowns shut down large parts of the economy.