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Week Ahead: What to Watch in Bank Earnings

Jeremy Glaser

Jeremy Glaser: For Morningstar, I'm Jeremy Glaser. Welcome to The Week Ahead, our quick take on what investors should have on their radar screens for the week starting Oct. 12.

Earnings season kicks off in earnest this week, and some of the most closely watched results will come from the big banks. We'll hear from JP Morgan Chase, Bank of America, Wells Fargo, Citigroup, and Goldman Sachs.

Last quarter, most of the banks showed stability as management teams continued to cut costs and loan portfolios kept performing well, even if net interest margins remained under pressure from the low rate environment.

This week, we'll be looking to see if there are still cost savings that can be wrung out of this businesses, and also get a sense of what impact the third-quarter's market volatility has had on trading results.

Outside of banks, we'll get results from Intel on Tuesday. Last quarter's big story was the delay of the firm's next generation of processors, which in some ways overshadowed the firm's solid results. We'll see if data center growth can help offset the impact of weaker PC sales.

Johnson & Johnson's results are likely to continue to show the firm's recent drug launches, helping offset the slowing sales for its older products, which are facing increasing competition. Still, we'd be surprised to see a large acceleration in growth in the quarter.

Netflix has been posting impressive numbers of subscribers recently, and on Wednesday we'll see if that trend can continue. One of the things we'll be watching closely is how successful the firm has been in adding subscribers abroad, where they have been investing heavily.

On the economic data side, we'll get inflation readings with both producer and consumer price indexes. Given that the Fed is worried about inflation running below the bank's long-term target, these reports will be in focus.

We'll also get a look at industrial production data, consumer sentiment, job openings, and retail sales.

Stay tuned to Morningstar for our take on all of these stories throughout the week.