June inflation readings and the start of earnings season

Earnings season kicks off next week with reports from some of the world’s biggest banks and financial institutions, including JPMorgan Chase, Wells Fargo, Citigroup, and BlackRock. We can also expect results from PepsiCo, Delta Air Lines, and UnitedHealth Group, among others. The latest inflation readings are set to be released with the June Consumer Price Index (CPI) on Wednesday and Producer Price Index (PPI) on Thursday. On Friday, the University of Michigan will report the preliminary reading of its Consumer Sentiment Index (MCSI) for July, providing a timely update on consumer confidence.

Earnings Season Kicks Off
Earnings season starts next week with reports from big banks and financial firms including JPMorgan Chase, Wells Fargo, Citigroup, and BlackRock. Bank of America, Morgan Stanley, and Goldman Sachs will report the following week. We can also expect earnings from UnitedHealth Group, Delta Air Lines, and Pepsi Company next week, among others.

Earnings for S&P 500 companies are projected to have fallen 6.8% in the second quarter, which would mark the steepest decline since the onset of the COVID-19 pandemic, according to FactSet research. It’s a more pessimistic outlook than a few months ago, when analysts were projecting a 4.7% decline at the end of March. Of the companies issuing guidance, 67 have reported negative guidance while just 46 have issued positive guidance.

June Inflation Reports
We’ll get the latest inflation figures on Wednesday with the June Consumer Price Index (CPI). Consumer prices are projected to have risen 0.3% last month. Year-over-year, they were likely up 3.6%, decelerating from 4% in May and marking the slowest annual pace since March 2021. Core prices, which exclude volatile food and energy costs, likely rose 0.4% from May and 5.2% from a year earlier.

The Producer Price Index (PPI), tracking inflation from the standpoint of manufacturers and wholesalers, will follow on Thursday. Producer prices are projected to have risen 0.2% last month, after falling 0.3% in May. They were likely up just 0.2% from a year ago, which would mark the smallest annual increase since September 2020, and compared to a peak of 11.7% in March of last year.