Banks kick off critical earnings season

After President Donald Trump’s new tariffs crushed global stocks for a second consecutive day, CNBC’s Jim Cramer said next week’s earnings reports will provide a first look at how CEOs are dealing with the fallout.

Big bank earnings headline the upcoming week, alongside inflation data. No matter what the numbers reveal, though, Cramer said the direction of the market will depend on Trump’s next move. The tariff-driven market rout could end soon if Trump grants relief to trading partners, he said, or it could suddenly get worse as it did on Black Monday in 1987.

“If President Trump stays intransigent and does nothing to ameliorate the damage that I saw these last few days, I’m not going to be constructive here,” Cramer said.

Retailer Levi Strauss reports earnings on Monday. Cramer said the jeans manufacturer is vulnerable to the impact of tariffs on countries like Japan and Mexico, and previous poor guidance punished the stock. Apparel company PVH posted positive earnings results this week, though, and Cramer said it’s possible Levi Strauss will beat expectations too.

Tuesday brings earnings from drugstore chain Walgreens and Cal-Maine Foods. Walgreens announced in March that it would go private in a roughly $10 billion deal with private equity firm Sycamore Partners. Meanwhile egg producer Cal-Maine could provide some insight on egg prices after they spiked in the winter, Cramer said.

Delta Air Lines announces its quarterly results on Wednesday, and although the airline cut its outlook in March, Cramer said the carrier’s earnings will still provide insight into the health of the travel industry. Alcoholic beverage giant Constellation Brands also reports Wednesday. Tariffs on Mexico could present further headwinds for the company, Cramer said.

On Thursday, used-vehicle retailer CarMax posts earnings results. While tariffs on new cars could boost sales for CarMax, Cramer said a potential recession would ultimately limit the stock’s appeal.

The Bureau of Labor Statistics also publishes the latest consumer price index report on Thursday. Inflation has become sticky, Cramer said, and Trump’s tariffs will further raise prices. That will put the Federal Reserve in a tough spot as it decides whether to cut interest rates in May, he said.

Friday unofficially kicks off earnings season as asset manager BlackRock and big banks JPMorgan Chase, Morgan Stanley and Wells Fargo all report their quarterly results. Even if the banks beat expectations, though, souring economic expectations due to tariffs have already punished their stocks and could continue to do so next week, Cramer said.

“Our only real hope is that the president comes up with something that can turn this bear into a bull,” Cramer said.

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of BlackRock and Wells Fargo.