Earnings Week; Inflation Data; More Tariffs

Forbes

14-07-2025

Streaming giant Netflix is scheduled to report later this week. (Photo by Patrick T. Fallon / AFP) ... More (Photo by PATRICK T. FALLON/AFP via Getty Images)
Key Takeaways
With little in the way of economic or earnings data, stocks were little changed last week. The biggest movers were the Dow Jones Industrial Average and Russell 2000, both of which fell roughly 1%. The S&P 500 and Nasdaq Composite were lower by roughly 0.25%. But weekend tariff news, a busy economic calendar and the kickoff of earnings season will give markets plenty of data to digest this week.
Let's begin with earnings. According to FactSet, overall earnings for the S&P 500 are expected to up 4.9% in the second quarter, year-over-year. Banks will begin reporting Tuesday morning before the open with Citigroup, JPMorgan Chase and Wells Fargo all scheduled to release their earnings. We'll hear from more big banks as well as regional banks throughout the week and then on Thursday, the first tech company, Netflix, will also announce their earnings. While I'm interested in all of these announcements, I'm particularly paying attention to Netflix as the company continues to make a push into live sporting events. Heading into the week, Netflix has an expected move of roughly $93 by Friday.
Turning to the economic calendar, there is quite a bit scheduled. On Tuesday, the Consumer Price Index (CPI) is due out. That will be followed on Wednesday by the Producer Price Index (PPI). On Thursday, we'll get the latest Retail Sales Report and then on Friday, both the Michigan Consumer Sentiment and Consumer Expectations Reports are slated for release. Both the CPI and PPI will be particularly interesting, and a lot of analysts are seeing these reports as no-win reports, which I'll explain.
Last week, President Trump began sending out letters to nations announcing tariff rates that will go into effect on August 1st. Both South Korea and Japan will be tariffed at 25%. On Saturday, Trump announced tariffs on the European Union (EU) and Mexico would be set at 30%, higher than the 15 - 20% range he had suggested earlier last week. Therefore, if CPI and/or PPI show an uptick in inflation, and we've yet to see the brunt of tariffs, it could cause concerns that inflation will continue moving higher. On the other hand, if the reports show inflation to be relatively muted, we still have yet to see the most severe tariffs kick in, and the reports could therefore be discounted.
One bright spot with respect to tariffs was the response from the EU. European Commission President Ursula von der Leyen said on Sunday that the EU would hold off on implementing retaliatory tariffs for now. The EU will use the time between now and the beginning of August to try and strike a deal with the Trump Administration on trade. While the tariff news is fluid and continues to send ripples through the market, it's worth noting they are just that, ripples, as opposed to the tsunami-sized waves we saw back in April. Therefore, it seems as though markets are adapting to more quickly digesting tariff news.
For today, I'm keeping an eye on bonds and silver. President Trump has continued to put pressure on Fed President Jerome Powell to step down and that appears to have done nothing to help increase confidence in the bond market where the 30-year yield is at 4.98% and the benchmark 10-year note is at 4.43%. I'm also watching silver, which is trading at levels we haven't seen since 2011. All of the metals have moved significantly higher, following last week's announcement of copper tariffs.
Lastly, according to UBS, on average it takes the S&P 500 105 days to see a pullback of at least 5% when the index is at an all-time high. Now, ask any trader and they'll tell you past performance doesn't mean anything. However, it is interesting to note when markets are enthusiastic, they tend to stay enthusiastic. As always, I would stick with your investing plan and long term objectives.
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