By Liz Moyer
Investing.com -- Stocks continue to trade up on optimism about a coronavirus vaccine, as big banks blow past expectations on their second quarter performance.
On Wednesday, it was Goldman Sachs Group Inc (NYSE:GS)'s turn to dazzle, handily beating analyst forecasts on the strength of its trading operations. It joined JPMorgan Chase & Co (NYSE:JPM) and Citigroup Inc (NYSE:C) on that trend, while Wells Fargo & Company (NYSE:WFC) reported its first quarterly loss in a decade on Tuesday.
More bank earnings are on tap for Thursday, along with profit reports from other big companies like Netflix Inc (NASDAQ:NFLX), Johnson & Johnson (NYSE:JNJ) and Abbott Laboratories (NYSE:ABT).
Retail sales numbers will be released in the morning, and analysts will undoubtedly be watching for signs that the economy is coming back to life despite recent rollbacks of business openings following the Covid lockdowns.
Here are three things that could affect the markets tomorrow:
1. Earnings could reveal how retail Investors reacted to lockdowns
Thursday's earnings line-up includes Bank of America Corp (NYSE:BAC), Morgan Stanley (NYSE:MS) and Charles Schwab Corporation (NYSE:SCHW) on the financial front. All three are expected to benefit from trading, as other banks demonstrated in their reports this week.
Schwab may shed a light on activity by retail investors as people took to trading the markets during a period of high volatility. Stay at home orders that covered much of the second quarter may have been all the excuse some people needed to start trading in their spare time. Online brokers are getting a lot of attention recently. Morgan Stanley is seeking to acquire Schwab competitor ETrade Financial in a $13 billion deal linking Wall Street and Main Street. Shareholders recently approved Schwab's own $26 billion merger with TD Ameritrade (NASDAQ:AMTD).
Analysts tracked by Investing.com expect Schwab to report profit of 52 cents a share on revenue of $2.5 billion.
2. Netflix earnings on tap
Netflix Inc (NASDAQ:NFLX) also reports earnings on Thursday. The video streaming giant, a big beneficiary of shelter-in-place orders that boosted demand for home entertainment, is seen reporting EPS of $1.82 on revenue of $6.1 billion.
As part of the FAANG cohort of big tech stocks, Netflix has helped push NASDAQ Compositeto repeat record highs in recent days, but it faces increasing competition from other streaming services, including one rolled out this week by NBC Universal.
Netflix shares hit a 52-week high of $575 on Monday but have since drifted lower.
3. Retail sales numbers due out for June
Retail sales are scheduled to be released Thursday at 8:30 AM ET (1230 GMT), and analysts will be watching to see if May's big jump can be repeated. They are anticipating a gain of 5% in June.
Sales surged an unexpectedly strong 17% in May after plunging in April amid Covid-related lockdowns, and sales excluding autos and gas rose 12.4% in May. Many areas of the country opened more fully in June, though recent spikes in virus cases has forced some states and cities to rollback those reopening efforts.
Retailers such as Walmart Inc (NYSE:WMT)have hit recent highs as consumers continue to shop despite restrictions. Walmart hit a 52-week high again on Wednesday even after the company said it would require shoppers to wear masks in all 5,000 of its stores. It joins other major retailers, including Best Buy Co Inc (NYSE:BBY) Costco Wholesale Corp (NASDAQ:COST) and Apple Inc (NASDAQ:AAPL), with a mask requirement.
Other stocks have also gotten a boost from strong sales, including Hanesbrands Inc (NYSE:HBI), the underwear and comfort apparel maker, which jumped 15% in trading on Wednesday after analyst upgrades.