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Day Ahead: Top 3 Things to Watch

PepsiCo Reports Earnings Before the Bell Tuesday

Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow.

1. Pepsi Reports Earnings With Margins in Focus

With the Independence Day holiday in the rearview mirror, Wall Street turns its attention to second-quarter earnings.

The bulk of reports start next week, but this week still has some major names issuing results, starting Tuesday morning with PepsiCo (NASDAQ:PEP).

On average, analysts expect Pepsi to report quarterly earnings of $1.53 per share, on revenue of $16.09 billion.

Gross margins will be of particular interest to investors.

Last week, Deutsche Bank (DE:DBKGn) downgraded Pepsi to hold from buy. Deutsche’s analyst predicted a drop in quarterly gross profit margin due to commodities inflation.

2. Job Openings Expected to Decline

The economic calendar is fairly light tomorrow, but more employment numbers will arrive.

The JOLTs job openings data are scheduled for 10:00 AM ET (14:00 GMT).

Economists expect that job vacancies dropped to 6.583 million in June from 6.698 million in May.

On Friday, the Labor Department reported that nonfarm payrolls rose more than expected, while wage growth was lower than forecast last month.

Before the bell, the National Federation of Independent Business (NFIB) small business optimism index is released at 6:00 AM ET (10:00 GMT). Economists predict a drop to 105.6 in June from 107.8 in May.

3. Currencies See Action as Brexit Resignations Pile Up

The currency market could also garner some extra attention from investors after Monday’s whipsaw action.

The pound struggled after the resignation of Boris Johnson as U.K. foreign secretary. Johnson became the third member of the government to resign within 24 hours in protest over plans for a soft Brexit.

GBP/USD came under pressure, falling 0.32% to $1.3245.

The pound dropped against the dollar and the euro. If dollar strength continues, that could put pressure on shares of companies that rely on a weaker dollar to boost international revenue.

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