Charles Schwab, Retail Sales, Consumer Sentiment: 3 Things to Watch

© Reuters.

By Dhirendra Tripathi — Stocks zigzagged on Thursday and closed the day mixed as big banks continued to top Wall Street expectations for the second quarter, boosting their shares even as the yields on Treasuries slipped again.  

Morgan Stanley (NYSE:) beat expectations on the both the top and bottom lines as strength in equities trading and investment banking fees bolstered performance. Its report follows JPMorgan Chase (NYSE:), Goldman Sachs (NYSE:), Bank of America (NYSE:), Citigroup (NYSE:) and Wells Fargo (NYSE:) this week.

Regional banks also posted strong results despite evidence of sluggish loan activity in the industry. Both U.S. Bancorp and Truist Financial (NYSE:) topped expectations. 

But the backdrop of positive quarterly results for banks failed to inspire investors in the broader market as energy and tech stocks fell.

On the economic front, the recovery in the labor market continues to gather pace as jobless claims fell to a pandemic low. Initial jobless claims fell 26,000 to 360,000 from an upwardly-revised 386,000 in the week ending July 10.

Retail sales data, due for release on Friday, will serve as a gauge for the health of the consumer.

Here are three things that could affect markets tomorrow:

 1. A glimpse at retail trading

 Morgan Stanley’s brokerage results jumped after the company acquired online broker E-Trade last year. Charles Schwab (NYSE:), which acquired online rival TD Ameritrade last year, is due to report its results on Friday. Analysts tracked by expect earnings per share of 75 cents for the second quarter on revenue of $4.46 billion.

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 2. Consumer health measured

 Retail sales numbers for June come out Friday at 8:30 AM ET (1230 GMT). They are seen dipping 0.4% in June on a month-on-month basis after a 1.3% fall in May.

 3. Consumer sentiment

 The University of Michigan’s Survey of Consumer Sentiment is seen improving to 86.5 in July from 85.5 in June. This is the initial reading and will be revised. The data are due out at 10:00 AM ET.


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