What to expect when the market opens Monday, July 13

Earnings season kicks off

Monday starts a big week for markets. Q2 earnings season begins, with Citigroup, Goldman Sachs, Wells Fargo, JPMorgan Chase, and Bank of America reporting Wednesday, July 15, followed by Netflix, Abbott Laboratories, and UnitedHealth Group. Analysts expect a second straight quarter of 20%+ earnings growth, which would support the bull case for equities holding through the second half of the year.

What else to watch

On the macro side, watch June inflation data, retail sales, and housing starts this week. The 10 year yield has been climbing, forecast to move from the mid 4.4% range toward 4.6% by Friday. So far the market has been digesting higher long term yields without panic selling, the read for the week is a measured recalibration and sector rotation rather than a broad selloff.

My take

Rising yields plus strong earnings growth is an interesting combination, usually one of those wins out. If earnings really do come in above 20% growth again, the market probably shrugs off the yield move, but if even one of the big banks flags weaker guidance Wednesday, expect a rougher week than the calm tone right now suggests. For anyone on a long term index approach, like VTI, VXUS, and BND, none of this changes the plan, weeks like this are noise, not a reason to time the market.

This is commentary, not financial advice, always do your own research before making moves in your portfolio.

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