What to Expect in the Week Ahead (JPMorgan and Delta Earnings; June Inflation Data and Sentiment Surveys)

Second-quarter earnings season begins this week with several large U.S. banks set to report. The latest inflation data will be closely watched by investors and economists alike.

The economic-data highlight of the week will be the Bureau of Labor Statistics' consumer price index for June on Wednesday. Economists' consensus estimate calls for a 3.1% increase in the headline CPI from a year earlier, which would be a point less than in May. The core CPI is seen rising 5% year over year, 0.3 percentage point less than a month earlier. Both would be the slowest rates of inflation since 2021. The BLS also releases the producer price index for June on Thursday.

Other data out this week will include a pair of sentiment indicators. On Tuesday, the National Federation of Independent Business will release its Small Business Optimism Index for June. On Friday, the University of Michigan releases its Consumer Sentiment index for July.

The Federal Reserve reports consumer credit data for May.

The National Federation of Independent Business releases its Small Business Optimism Index for June. Consensus estimate is for a 89.9 reading, slightly higher than the May figure. The index remains anchored near a decade low, as supply-chain disruptions and labor shortages—even as they have eased some in the past year—continue to hurt small businesses.

The Bureau of Labor Statistics releases the consumer price index for June. Economists forecast that the CPI will increase 3.1% year over year, nearly a full percentage point less than in May. The core CPI, which excludes volatile food and energy prices, is seen rising 5%, three-tenths of a percentage point less than previously. The CPI is at its lowest level since March 2021, and the core CPI since November 2021.

The BLS releases the producer price index for June. The PPI is expected to rise a scant 0.4% year over year, while the core PPI is seen increasing 2.5%. This compares with gains of 1.1% and 2.8%, respectively, in May. The PPI is at its lowest level since late 2020, and the core PPI since early 2021.

The Department of Labor reports initial jobless claims for the week ending July 8. Claims averaged 245,000 in June, the most since late 2021, a sign that the hot labor market might be cooling.

Second-quarter earnings season kicks off with three of the largest banks—Citigroup, JPMorgan Chase, and Wells Fargo—reporting. S&P 500 earnings are expected to decline 6.8% year over year. That would mark the largest drop since second-quarter 2020's 31.6% plummet.

The University of Michigan releases its Consumer Sentiment index for July. The consensus call is for a 65.5 reading, slightly higher than June's. Consumers' expectations of inflation for the year ahead was 3.3% in June, the lowest in more than two years.